JOURNAL ARTICLE

A Market-Based Measure of Climate Friendliness: Evidence from Anti-ESG Legislation and Extreme Weather Events.

  • Published In: Journal of Impact & ESG Investing, 2025, v. 6, n. 2. P. 119 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Eisdorfer, Assaf; Lou, Xiaoxia; Ozik, Gideon; Sadka, Ronnie 3 of 3

Abstract

Stock prices of firms classified by rating agencies as climate friendly/unfriendly do not respond to climate news. The lack of responsiveness extends to institutional holdings as well as returns and capital flows to green/brown mutual funds. This article proposes a market-based measure of climate friendliness that traces the sensitivity of stock prices to aggregate media attention to the environment while distinguishing the contrasting implications of regulation and nonregulation environment news. In comparison to agency ratings, the market-based measure better captures the decrease in green-minus-brown return spreads following anti-ESG legislation passed in several US states in recent years and reacts more sharply to extreme weather events. [ABSTRACT FROM AUTHOR]

Additional Information

  • Source:Journal of Impact & ESG Investing. 2025/12, Vol. 6, Issue 2, p119
  • Document Type:Article
  • Subject Area:Earth and Atmospheric Sciences
  • Publication Date:2025
  • ISSN:2693-1982
  • DOI:10.3905/jesg.2025.1.141
  • Accession Number:190284441
  • Copyright Statement:Copyright of Journal of Impact & ESG Investing is the property of With Intelligence Limited and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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