Background and Motivation
Climate change, driven by carbon emissions, has become a core concern for policymakers, investors, and corporate leaders worldwide. In recent years, global efforts such as the Paris Agreement and divestment strategies by major asset managers have aimed to accelerate the transition to a low-carbon economy. Yet, the question remains: Do these initiatives influence investor behaviour in capital markets? Are investors becoming more attentive to the carbon profiles of firms? China Finance Review International (CFRI) brings you a new article titled ‘ Do investors care about carbon emissions? Evidence based on stock return co-movement with machine learning-augmented data ’, which examines whether and how the carbon emissions of US-listed firms shape patterns in stock return co-movement over time.
Methodology and Scope
This study leverages a unique, two-pronged approach.
Key Findings and Contributions
Why It Matters
These findings demonstrate a clear evolution in investor behaviour: market participants are increasingly pricing carbon risk, especially in response to regulatory signals and growing environmental awareness. As responsible investment practices gain traction, companies’ carbon footprints are becoming a more material factor in their valuation and risk assessment. This has significant implications for corporate disclosure, capital allocation, and the broader transition toward sustainable finance.
Practical Applications
Discover high-quality academic insights in finance from this article published in China Finance Review International . Click the DOI below to read the full-text original! Open access for a limited time!
China Finance Review International
News article
Do investors care about carbon emissions Evidence based on stock return co-movement with machine learning-augmented data
5-Jun-2025