Do Investors Care About Green Innovation?

Event Date: 2 March 2022

Speaker: Pawel Czarnowski, University of Strathclyde

Time: 1.30pm (Zoom details will be emailed to faculty, otherwise please email donna.irving@strath.ac.uk)

Abstract:

Despite the importance of green innovation in fighting climate change, we find that green patent announcements do not have a positive effect on shareholder wealth. Even green patents that are granted to firms with a high climate risk exposure have no significant wealth impact. Similarly, neither the level of climate change concerns, nor the level of institutional investor ownership or attention make green patents announcements more valuable. Moreover, the adoption of the Paris Agreement had no effect on the market valuation of green innovation. We also find no evidence that the number of green patents obtained by a company affects its environmental score, level of institutional investor ownership, or Tobin’s Q. Despite all the talk that green innovation is key for climate change mitigation, investors seem to be indifferent to its impact on firm value. 

Published: 24 February 2022