Carbon markets and firms' perceived climate regulatory risk.
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| Title: | Carbon markets and firms' perceived climate regulatory risk. |
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| Authors: | Adamolekun G; The Business School, Edinburgh Napier University, Edinburgh, EH14 1DJ, UK. Electronic address: B.Adamolekun@napier.ac.uk., Li H; Cardiff Business School, Cardiff University, Cardiff, CF10 3AF, UK. Electronic address: lih86@cardiff.ac.uk., Xu B; Edinburgh Business School, Heriot-Watt University, Edinburgh, EH14 4AS, UK. Electronic address: b.xu@hw.ac.uk. |
| Source: | Journal of environmental management [J Environ Manage] 2025 Oct; Vol. 393, pp. 127050. Date of Electronic Publication: 2025 Aug 28. |
| Publication Type: | Journal Article |
| Language: | English |
| Journal Info: | Publisher: Academic Press Country of Publication: England NLM ID: 0401664 Publication Model: Print-Electronic Cited Medium: Internet ISSN: 1095-8630 (Electronic) Linking ISSN: 03014797 NLM ISO Abbreviation: J Environ Manage Subsets: MEDLINE |
| Imprint Name(s): | Original Publication: London ; New York, Academic Press. |
| MeSH Terms: | Carbon* , Climate Change* |
| Abstract: | Competing Interests: Declaration of competing interest The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper. This study examines how involvement in emissions trading schemes (ETS) affects firm climate regulatory risks (FCRR) across 36 countries from 2003 to 2021. We find a positive link between ETS membership and FCRR. Furthermore, we investigate how governance structures and firm-specific factors influence this relationship. Our analysis indicates that factors such as financial constraints, CEO network size, CEO tenure, the number of independent directors, and board size can lessen the impact of ETS membership on FCRR. Conversely, higher corporate political risk, membership in carbon-intensive industries, and a greater number of co-opted board members intensify this effect. Early participation in the scheme appears to reduce the firms' climate regulatory risk, while subsequent withdrawal increases it. Notably, the influence of ETS on FCRR is mainly observed among firms operating in developed economies. Legislative shocks, such as the EU Climate and Energy Package, diminish the positive effect of the ETS on FCRR. Overall, our findings highlight the sensitivity of firm-level climate regulatory risk to strategic decisions regarding ETS participation and exit. (Copyright © 2025 The Authors. Published by Elsevier Ltd.. All rights reserved.) |
| Contributed Indexing: | Keywords: Carbon markets; Climate change regulatory risk; Emission trading schemes (ETS); Firm climate action; Firm climate change risk |
| Substance Nomenclature: | 7440-44-0 (Carbon) |
| Entry Date(s): | Date Created: 20250829 Date Completed: 20251015 Latest Revision: 20251015 |
| Update Code: | 20251015 |
| DOI: | 10.1016/j.jenvman.2025.127050 |
| PMID: | 40882275 |
| Database: | MEDLINE |
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Nájsť tento článok vo Web of Science | Abstract: | Competing Interests: Declaration of competing interest The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.<br />This study examines how involvement in emissions trading schemes (ETS) affects firm climate regulatory risks (FCRR) across 36 countries from 2003 to 2021. We find a positive link between ETS membership and FCRR. Furthermore, we investigate how governance structures and firm-specific factors influence this relationship. Our analysis indicates that factors such as financial constraints, CEO network size, CEO tenure, the number of independent directors, and board size can lessen the impact of ETS membership on FCRR. Conversely, higher corporate political risk, membership in carbon-intensive industries, and a greater number of co-opted board members intensify this effect. Early participation in the scheme appears to reduce the firms' climate regulatory risk, while subsequent withdrawal increases it. Notably, the influence of ETS on FCRR is mainly observed among firms operating in developed economies. Legislative shocks, such as the EU Climate and Energy Package, diminish the positive effect of the ETS on FCRR. Overall, our findings highlight the sensitivity of firm-level climate regulatory risk to strategic decisions regarding ETS participation and exit.<br /> (Copyright © 2025 The Authors. Published by Elsevier Ltd.. All rights reserved.) |
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| ISSN: | 1095-8630 |
| DOI: | 10.1016/j.jenvman.2025.127050 |