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Mandatory emissions reporting and long-run financial performance of listed firms in the UK

Vineet Upreti Orcid Logo, Yi Zhang

The European Journal of Finance, Pages: 1 - 22

Swansea University Author: Vineet Upreti Orcid Logo

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DOI (Published version): 10.1080/1351847x.2025.2585963

Abstract

Based on arguments derived from the neo-institutional theory, this study investigates the relation between emissions intensity and long-term equity returns in UK listed non-financial firms over a 15-year period (2005-2019). Using mandatory emissions reporting regulation of 2013 as a quasi-natural ex...

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Published in: The European Journal of Finance
ISSN: 1351-847X 1466-4364
Published: Abingdon Informa UK Limited 2025
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa70757
Abstract: Based on arguments derived from the neo-institutional theory, this study investigates the relation between emissions intensity and long-term equity returns in UK listed non-financial firms over a 15-year period (2005-2019). Using mandatory emissions reporting regulation of 2013 as a quasi-natural experiment, we find evidence that there existed a negative association between emissions intensity and long-term equity returns in both high and low emissions industries before the 2013 regulation was implemented. Our results further reveal that the implementation of the aforementioned regulation altered the equity return-emissions intensity relation from negative to positive for high emissions industries, while low emissions industries showed no significant change. This divergence suggests that the 2013 regulation has played a crucial role in reshaping investor expectations by highlighting the exposure of polluting industries to regulatory and litigation risks associated with higher emissions.
Keywords: GHG emissions; mandatory disclosure; equity returns; financial performance
College: Faculty of Humanities and Social Sciences
Funders: Swansea University
Start Page: 1
End Page: 22

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