Abstract
We hypothesize that corporate carbon performance is negatively associated with accounting-based financial performance and that this relationship is positive for market-based financial performance. We use an international dataset of 26,813 firm-year observations from 2005-2014. Surprisingly, we find a negative linkage for both types of financial performance. We find support for our results in several robustness checks and when comparing US and European firms. Only for firms regulated by the EU Emission Trading System, we cannot find such a negative linkage. We conclude that there is clear need for policy interventions in order to pave the way for a low-carbon economy.
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