NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Stefano Ramelli

University of Zurich
Department of Banking and Finance
Plattenstrasse 14
Zurich CH-8032
Switzerland

E-Mail: stefano.ramelli@bf.uzh.ch
Institutional Affiliation: University of Zurich

NBER Working Papers and Publications

November 2018Investor Rewards to Climate Responsibility: Evidence from the 2016 Climate Policy Shock
with Alexander F. Wagner, Richard J. Zeckhauser, Alexandre Ziegler: w25310
Donald Trump's election and his nomination of Scott Pruitt, a climate skeptic, to lead the Environmental Protection Agency drastically downshifted expectations on US climate-change policy. We study firms' stock-price reactions and institutional investors' portfolio adjustments after these events. As expected, carbon-intensive firms benefited. Should not companies with responsible strategies on climate change have lost value, since they were paying for actions that were now less urgent? In fact, investors actually rewarded such firms. The premium the firms received resulted, at least in part, from the move into climate-responsible stocks by long-horizon investors presumably expecting a post-Trump rebound to green policy.
 
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