Date of submission: May 1, 2022; date of acceptance: June 6, 2022.
* Contact information (corresponding author): rajesh.desai8@gmail.com, rajesh.
desai@nirmauni.ac.in, School of Liberal Studies, Pandit Deendayal Energy University,
Gandhinagar, Gujarat, India, phone: 8160467579; ORCID ID: https://orcid.org/0000-
0003-3611-8409.
** Contact information: avaniraval@nirmauni.ac.in, Institute of Management, Nir-
ma University, Ahmedabad Gujarat, India, phone: 9375482929; ORCID ID: https://orcid.
org/0000-0002-3933-6316.
Copernican Journal of Finance & Accounting
e-ISSN 2300-3065
p-ISSN 2300-12402022, volume 11, issue 3
Desai, R., & Raval, A. (2022). Examining the Relation Between Market Value and CO2 Emission:
Study of Indian Firms. Copernican Journal of Finance & Accounting, 11(3), 9–25, http://dx.doi.
org/10.12775/CJFA.2022.011
Rajesh Desai*
Pandit Deendayal Energy University
avani Raval**
Institute of Management, Nirma University
examining the Relation between maRket value
anD co2 emission: stuDy of inDian fiRms
Keywords: market value, CO2 emission, India, sustainability, emerging.
J E L Classification: Q51, Q56.
Abstract: In the present era, sustainable business practices have become an important
metric for measuring the organisational effectiveness. Shareholders have added sus-
tainability as an important dimension of firms’ performance and consider it as value
relevant for determining the market value of any company. Given the premises, pre-
sent study examines the impact of CO2 emission on the market value of the firm (meas-
ured by market-to-book value ratio and Tobin’s Q ratio) in the context of a developing
country. Current study is based on panel data of 230 firm-year observations collected
from the annual report of Carbon Disclosure Project (CDP) and annual report of sam-
ple companies. Using panel least square regression analysis, the findings indicate sig-
nificant adverse impact of CO2 emission on the firm value. In other words, sharehold-
Rajesh Desai, Avani Raval1010
ers assign negative value to higher discharge of carbon dioxide and ref lect the same by
lowering the market value of shares. Further, the results are checked for robustness us-
ing generalised method of moments (GMM) and the conclusions are found coinciding.
Present findings have important implications for regulatory authorities, policy makers,
and practicing managers.
Introduction Introduction
Though industrialisation has brought several progressive changes in the evo-
lution of human life, one of the most antagonistic effects is the environmental
degradation which forced us to think about the success of the current state of
world economy. Ecological concerns such as global warming, monsoon irregu-
larities, and natural calamities such as f loods and famines are the outcomes of
raising emission of carbon and other toxic materials by the industrial and manu-
facturing undertakings. However, the global community have started respond-
ing to this and the United Nations Framework Convention on Climate Change
(UNFCCC), has initiated to address this issue. In 2005, the Kyoto protocol has
been imposed to confine the amount of CO2 discharge to the allowable range
for the advanced nations. CO2 discharge is one of the critical determinants of
degradation of environment quality and investors and shareholder considered
the same as an important issue affecting firm value (Busch & Hoffmann, 2011;
Lewandowski, 2017). Cumulative awareness and concern about polluting en-
vironment has pressurised companies to reduce their GHG emission (Jeswani,
Wehrmeyer & Mulugetta, 2008; Raval, Saxena & Thanki, 2021) and evaluate as
well as report opportunities and/or threats arising from climate-change faced
by the companies (Matsumura, Prakash & Vera-Muñoz, 2014). This gave rise to
a long-standing debate among the organisations as well as researchers about
the association between emission level and the firm performance. Till now, sev-
eral studies have been conducted on different facets of society, governance and
environment along with their possible inf luence on the financial performance
(Kleimeier & Viehs, 2016). Primarily, these research inquiries have focused
on developed economies (Nishitani & Kokubu, 2012; Ramiah, Martin & Moo-
sa, 2013) which have an established legal and institutional framework for dis-
closing environmental and emission data. However, this area is underexplored
with respect to the emerging countries like India (Aifuwa, 2020).
In the given context, present study attempts to provide comprehensive ex-
amination of the association between market value of firm and the level of car-
Examining thE rElation BEtwEEn markEt valuE and CO2 Emission… 1111
bon discharge. Shareholders use the disclosed financial and non-financial data
of the company to value its market performance and these disclosures can low-
er the asymmetry of information between investors and managers. Further,
it eases the forecasting of stock returns and reduces the risk and uncertainty
(Poshakwale & Courtis, 2005). Present study uses market-to-book value (MBV)
and Tobin’s Q (TQ) ratio to measure the market value of the firm whereas CO2
emission data has been considered as explanatory factor. Besides, firm-specific
control variables are also adopted for comprehensive results. The outcomes of
research indicate negative and significant impact of carbon emission on both
measures of market value of the selected companies. Further, these results are
important as they prove that participants of capital market consider pollution
disclosure as vital information even in developing countries like India which
are not obliged to reduce CO2 discharge.
The current investigation adds value to the extant research in three major
ways. First, the present study examines the issue in the Indian context which is
considered to be one of the fastest growing economies and also holds the fourth
position in the global CO2 emission (Kumar & Firoz, 2018). Further, developed
and emerging countries have significant structural differences and therefore,
the research outcome of the developed countries needs further probing before
applying to developing nations. Secondly, the study is based on longitudinal
data of seven years (2013–2019) considering the phase-II of Kyoto protocol in-
stead of cross-sectional data which provides more robust and reliable results.
Third, the robustness of results has been further examined by using general-
ised method of moments (GMM) for reliability and validity.
Research methodology and the course of research processResearch methodology and the course of research process
Present research is aimed to examine the relation between and the effect of CO2
emission on market value of the Indian companies. Like other emerging econo-
mies, environmental reporting including carbon emission is not compulsory in
India and therefore the sample companies are selected from the annual report
of Carbon Disclosure Project (CDP) annual reports. Financial and other data
has been collected for a reference period of 7 years (2013–2019) considering
the second phase of the Kyoto protocol. The study uses Tobin’s Q and MBV ratio
to measure the market value whereas log of CO2 emission as independent vari-
Rajesh Desai, Avani Raval1212
able. Using multiple and GMM regression analysis, the study concluded signifi-
cant negative effect of emission on firm value.
Review of literature and hypothesis formulationReview of literature and hypothesis formulation
Environmental Disclosure TheoriesEnvironmental Disclosure Theories
Environmental disclosures provide vital information for signalling corporate
performance and attracting funds as well as to improve goodwill (Verrecchia,
1983). Corporate environmental disclosures are largely governed by two theo-
ries named as ‘voluntary disclosure’ (Luo & Tang, 2014) and ‘legitimacy theory’
(Gray, Kouhy & Lavers, 1995). Voluntary disclosure theory depicts that firms
with lower level of CO2 emission will be motivated to disclose the same as it
enhances their goodwill and the competitive advantage over other companies
(Clarkson, Overell & Chapple, 2011). On the contrary, companies with high car-
bon emission inclined to avoid disclosing such information and continue them-
selves as average performers (Giannarakis, Konteos, Sariannidis & Chaitidis,
2017). Legitimacy theory is built upon the concept of ‘corporate citizenship’,
wherein companies disclose non-financial information to legitimise their ac-
tivities (Brammer & Pavelin, 2006). According to this approach, companies
with high levels of CO2 discharge are anticipated to reveal more information
to provoke the increased risk of legality and eventually change the opinion of
stake-holders by educating and informing them about the changes in their per-
formance and these companies attempts to highlight other accomplishments
related to the social cause.
Review of empirical studies and development of hypothesisReview of empirical studies and development of hypothesis
Past studies focusing on CO2 and firm performance have been differentiated on
two major themes, i.e. ‘win-lose’ and ‘win-win’ (Boiral, Henri & Talbot, 2012).
According to the win-lose argument, the national obligation to diminish CO2
emission enforces taxes, penalties and legal actions against high emitting com-
panies. In other words, endeavours to cut carbon discharge results into unpro-
ductive utilisation of resources which adversely affect the relative position of
firm compared to competitors (Delmas, Nairn-Birch & Lim, 2015; Wang, Li &
Gao, 2014). In disagreement to this, promoters of alternative argument advo-
Examining thE rElation BEtwEEn markEt valuE and CO2 Emission… 1313
cate that an attempt to lower CO2 discharge brings indirect profit opportunity
in form of encouraging innovations that increases revenue or reduces cost (Por-
ter & van der Linde, 1995). According to this approach, financial performance
of the organisation can be improved by reducing CO2 emission (Dowell, Hart &
Yeung, 2000; Boiral et al., 2012; Raval et al., 2021). Past studies from Al-Tuwai-
jri, Christensen and Hughes II (2004), Wang et al. (2014), and Kumar and Firoz
(2019) have studied the effect of CO2 emission on market value of firm. Howev-
er, the findings are found to be contradictory. Further, as pointed by Margolis,
Elfenbein and Walsh (2008) and Garcia-Castro, Arino and Canela (2010), find-
ings of past research are subject to the measures used for indicating the vari-
ables. According to Lee, Park and Klassen (2013), shareholders respond nega-
tively to CO2 emission and their findings concluded that high emitting firms
will have lower market value. Similar findings are reported by Saka and Oshika
(2014) in their research on more than 1000 Japanese firms and concluded ad-
verse relation between market price of share and level of CO2 emission. Consid-
ering a sample of S&P 500 companies, Matsumura et al. (2014) have indicated
that increase in CO2 emission will lead to reduction in price of ordinary shares.
Similarly, findings of King and Lenox (2001), Al-Tuwaijri et al. (2004), Ramiah
et al., (2013) have also supported negative relation between firms’ level of car-
bon emission and market value. Delmas et al. (2015) have analysed the impact
of CO2 emission on financial peroformance using cross-sectional data of 1095
US firms. They have divided economic performance as short-term (indicated by
ROA) and long-term (indicated by Tobin’s Q ratio) and suggested negative effect
of reduction in carbon emission on ROA and positive effect of the same on Q ra-
tio. Investment for reducing carbon emission may not yield returns in short-run
but capital market participants realise the importance of the same and hence
act favourably towards the strategies implemented to reduce GHG and carbon
emission in environment (Delmas et al., 2015). It is important here to note that
extant literature has also found that negative effect of CO2 can be reduced if
the firms discloses the data publicly. As against major past studies, Wang et al.
(2014), using tobin’s Q ratio, have found direct relation between the level of CO2
emission and firm value in the Australian context.
As pointed earlier, limited studies have explored the relation between CO2
emission and market value of the firm. Ganda and Milondzo (2018), using data
of South African companies, have found negative effect of CO2 emission on firm
performance. Kumar and Firoz (2019) have studied effect of certified emission
reduction announcements on abnormal stock returns using event study meth-
Rajesh Desai, Avani Raval1414
odology. They have reported that capital markets do not respond to such an-
nouncements significantly and concluded weak effect of emission reduction
on stock returns. Therefore, research findings of developing nations are partly
congruent with developed ones but still require further empirical evidence to
generalise the same. The above discussion signifies the importance of carbon
emission and its effect on firm value. Though several studies have attempted to
draw meaningful insights, the findings are contradictory and inadequate and
hence present study attempts to contribute in this growing pool of knowledge.
Based on past empirical results, the study hypothesised that:
Hypothesis 1: CO2 emission will have negative impact on firms’ market value.
Research methodologyResearch methodology
Operationalisation of VariablesOperationalisation of Variables
Table 1 summarises the variables considered for study categorised as independ-
ent, dependent, and control. The table also describes the concept, formula, and
source of including variable. According to Margono and Gantino (2021), the mar-
ket value depends on the firm-specific variables such as firm size, leverage and
sales growth which are used as control variables along with carbon emission.
Table 1. Description of Variables
Variables Computation Source
Dependent Variable
Tobin’s Q ratio (TQ) King & Lenox (2001);
Delmas et al. (2015)
Market-to-Book Value (MBV) Delmas et al. (2015)
Explanatory Variables
Carbon Emission (CEM) Log (Carbon Emission) Wang et al. (2014);
Delmas et al. (2015)
Control Variables
Growth (GR) Al-Tuwaijri et al. (2004)
Examining thE rElation BEtwEEn markEt valuE and CO2 Emission… 1515
Variables Computation Source
Size (SZ) Log (Total Assets) Li et al. (2014);
Matsumura et al. (2014)
Leverage (LV) Giannarakis et al. (2017);
Griffin, Lont, & Sun (2017)
Capital Intensity (CI) Chithambo & Tauringana (2014);
Ganda & Milondzo (2018)
S o u r c e : summarised from the review of literature and CMIE database.
Sample Selection and Collection of DataSample Selection and Collection of Data
Initially, companies that responded to the CDP questionnaire and reported CO2
emission data are considered for sample selection. As CO2 reporting is not man-
datory in India, the sample companies are not constant for the study period
and hence the obtained data set is an unbalanced panel data. Further, compa-
nies that belonged to financial service sector are removed as their regulatory
and operational framework differ from non-finance companies (Kumar & Fi-
roz, 2018). In addition, companies with insufficient financial data have been
further excluded to arrive at final sample. Table 2 presents the year-wise num-
ber of sample firms.
Table 2. Sample selection
Year
Companies that
disclosed CO2 data
Finance
companies
Companies
with incomplete data
Sample
Firms
2013 35 5 3 27
2014 39 4 4 31
2015 42 5 4 33
2016 44 6 5 33
2017 46 8 6 32
2018 48 8 6 34
2019 55 9 6 40
S o u r c e : author’s calculations.
Table 1. Description…
Rajesh Desai, Avani Raval1616
Annual reports of CDP have been considered as a source of collecting data of
CO2 emission. It is an international not-for-profit institution that collects and
summarises the data on carbon and other related toxic emission according to
country as well as corporates. Past studies from Wang et al. (2014), Gianna-
rakis et al. (2017) have also considered CDP as a trustworthy source for such
data. Further, PROWESS database has been utilised for collecting data of firm
value as well as other control variables as pointed in above section.
Effect of COEffect of CO22 emission on firm value emission on firm value
Present study is based on unbalanced panel data of CDP India firms that have
disclosed CO2 data through responding CDP questionnaire. Hence, two multi-
ple regression model by taking firm value, i.e. Tobin’s Q ratio and MBV as de-
pendent variable and emission of CO2 as independent have been formulated.
Referring the extant literature, the relation between CO2 and firm value is ex-
pected to be negative (Smale, Hartley, Hepburn, Ward & Grubb, 2006; Ramiah
et al., 2013; Lee et al., 2013; Delmas et al., 2015) and therefore sign of β1 will
be negative.
Tobin’s Qt = α + β1 × CO2 Emissiont + β2 × Growtht + β3 × Sizet + β4 × Leveraget
+ β5 × Capital Intensityt + β6 × Firm Effect + β7 × Year Effect + εt
(1)
MBVt = α + β1 × CO2 Emissiont + β2 × Growtht + β3 × Sizet + β4 × Leveraget
+ β5 × Capital Intensityt + β6 × Firm Effect + β7 × Year Effect + εt
(2)
Where:
α = Intercept
β1 to β5 = Regression co-efficient
ε = Error Term
t = Number of Year (2013 to 2019)
Examining thE rElation BEtwEEn markEt valuE and CO2 Emission… 1717
Further, as the study is based on multiple regression model, there is a possible
issue of multicollinearity and autocorrelation which has been tested using Var-
iance Inf lation Factor (VIF) and Durbin-Watson (DW) statistics respectively.
Besides, corporate finance research may expose to endogeneity issue arising
from omitted variables and simultaneity of occurrence. Presently, market val-
ue of the firm may affect the level of carbon emission leading to the problem of
reverse causality, i.e. simultaneity. Further, firm value is a function of several
company specific as well as macro variables and hence there can be possibility
of omitted variable bias. To address the same, the regression model indicated
above has been recomputed using generalised methods of moments (GMM) es-
timation.
Data Analysis And ResultsData Analysis And Results
Descriptive StatisticsDescriptive Statistics
Table 3 portrays the summary of descriptive statistics of the selected compa-
nies. First part of table represents the output for MBV and Tobin’s Q ratio. Aver-
age (median) values of Tobin’s Q ratio and MBV are 2.4114 (2.0318) and 3.9180
(3.1600) respectively indicating that the selected firms are performing well
with respect their market value. However, minimum and maximum values of
both measures demonstrate high-degree of variation among the sample com-
panies. Further, average CO2 emission for the selected period is more than eight
lakh matric tone with a standard deviation of 12.70 lakh matric tone (MT).
Higher value of standard deviation as compared to average represents enor-
mous level of variations among the selected companies so far as CO2 discharge
is concerned. The sample firms have reported a mean (standard deviation) rev-
enue growth rate of 10.67 (17.18) percent showing moderate but inconsistent
growth. Average value of debt-asset ratio for the sample is 0.3783 that shows
higher dependence on owners’ fund instead of debt. Lastly, based on the sum-
mary of data, it can be concluded that the sample firms can be characterised as
low levered, moderately growing, and medium size companies.
Rajesh Desai, Avani Raval1818
Table 3. Descriptive Statistics
Obs. Minimum Maximum Mean Median Std. Dev.
TQ 230 0.1130 9.8608 2.4114 2.0318 1.9882
MBV 230 0.3400 17.0000 3.9180 3.1600 2.9685
CO2 Emission (in MT) 230 2,517.00 56,093,007.00 8,001,650.00 186,860.00 12,704,512.00
Log (CO2 Emission) 230 1.5315 7.7489 5.2221 4.7994 1.6238
Sales Growth 230 -0.5470 1.7180 0.1067 0.1044 0.1718
Size 230 0.6105 6.5660 4.4790 4.5982 0.8887
Leverage 230 0.0286 0.8587 0.3783 0.3823 0.2198
Capital Intensity 230 0.0000 4.5391 0.1314 0.0596 0.5372
S o u r c e : author’s calculations.
Correlation AnalysisCorrelation Analysis
The coefficient of correlation depicts how strongly the dependent and inde-
pendent variables are related in a linear form. Correlation is an essential condi-
tion to be satisfied prior to the implementation of regression model. Output of
Pearson correlation has been summarised in table 4. In congruence with King
and Lenox (2001), the results indicate a significant negative correlation be-
tween CO2 emission and both measures of market value i.e., Tobin’s Q and MBV
ratio. With respect to the control variables, firm-size and leverage has been
found to be negatively and significantly correlated with market value meas-
ures which indicates that shareholders respond adversely to higher debt level.
Sales growth was found to have positive correlation with firm value but it lacks
statistical significance. Though majority of independent variables are not sig-
nificantly correlated, the study adopts variance inf lation factor (VIF) for exam-
ining the multicollinearity issue. The highest values of VIF for both regression
models (TQ and MBV) are 2.862 and 1.762 respectively. These values are lower
than the acceptable value of 10 (Wang et al. 2014; Gujarati, 2003) and therefore,
it can be concluded that the regression output will not be affected by multicol-
linearity.
Examining thE rElation BEtwEEn markEt valuE and CO2 Emission… 1919
Table 4. Correlation Matrix
TQ MBV CO2 SG Size LEV CI
TQ 1.0000
MBV 0.8717** 1.0000
CO2 -0.2052* -0.2410** 1.0000
SG 0.0068 0.1178 -0.2205* 1.0000
Size -0.3037* -0.1750** -0.0967 0.1501 1.0000
LEV -0.4290** -0.1295* 0.3089 -0.1069 -0.1093* 1.0000
CI -0.0753* -0.0617 -0.0572 -0.0300 0.0279 0.0498 1.0000
S o u r c e : author’s calculations.
Results of Regression AnalysisResults of Regression Analysis
Present study examines the relation between CO2 discharge and firm value. Ta-
ble 5 provides the summary output of regression analysis considering TQ and
MBV as dependent variables respectively. In line with the conclusion of ‘win-
win’ approach, the results indicate significant negative (p – value < 1%) impact
of CO2 emission on both measures of firm value. In other words, firms that en-
deavour to reduce CO2 levels will be rewarded by increased market value. Past
studies from Nishitani and Kokubu (2012), Saka and Oshika (2014), and Delmas
et al. (2015) have confirmed the negative effect of CO2 discharge on firm value.
Besides, investors value the sustainable environment practices of firms such
as carbon manegement of emitting firms and respond positively for such ini-
tiatives (Delmas, Etzion & Nairn-Birch, 2013). Negative impact of emission can
be explained as government, for reducing carbon emissions, imposes penalties
and other taxes on polluting firms and enforces them for making unproduc-
tive investments resulting into erosion of their profitability (Ganda & Milondzo,
2018; Wang et al., 2014). Besides CO2 emission, firm size and leverage are found
to have significant negative effect on firm value, whereas sales growth and cap-
ital intensity are not found to be insignificant.
Rajesh Desai, Avani Raval2020
Table 5. Regression Output using panel estimation
Variables Expected Relation Tobin’s Q MBV
Constant ----- 5.8127** (0.8182) 9.5268** (1.2128)
CO2 Emission Negative -0.0170* (0.08348) -0.4083** (0.1237)
Sales Growth Positive 0.5056 (0.7587) 1.5813 (1.1246)
Size ----- -0.7056*** (0.1441) -0.7227** (0.2136)
Leverage Negative -0.4643* (0.6059) -0.9620* (0.8981)
Cap. Intensity Negative -0.2135 (0.2143) -0.3125 (0.3177)
Firm Effect Yes Yes
Year Effect Yes Yes
F – Value (Sign. Level) 5.1119 (0.0002) 5.8520 (0.0000)
R2 / Adj. R2 0.5325 / 0.4938 0.3526 / 0.3354
Notes: Significant Level *: 5%, **: 1%, ***: 10%
S o u r c e : author’s calculations.
Result of GMM estimation – Robustness AnalysisResult of GMM estimation – Robustness Analysis
As mentioned earlier, the endogeneity problem, in corporate finance research,
mainly arises due to simultaneity between independent and dependent var-
iable and variables that are omitted. In the present context, the issue of en-
dogeneity may affect the conclusion as market value of the firm can inf luence
the dependent variables of the model such as CO2 emission. Stating differently,
companies with higher market value may not be willing to reduce carbon emis-
sion as it may affect their competitive position and later on, financial perfor-
mance. To control this issue, GMM estimation has been used to re-compute the
model and to assess the robustness of output (Wintoki, Linck & Netter, 2012;
Mubeen, Han, Abbas & Hussain, 2020). Table 6 summarises the GMM output
as well as Wald χ2 test for checking model significance, the serial correlation
test i.e., Arellano-Bond test AR (1) and AR (2), and lastly the Sargan test for
overidentifying restrictions. The results of GMM output are in alignment with
the first method that ensures robustness of results and the conclusion derived
from both the methods are parallel.
Examining thE rElation BEtwEEn markEt valuE and CO2 Emission… 2121
Table 6. Regression Output using GMM estimation
Variables Expected Relation Tobin’s Q MBV
Constant ----- 8.0705 (0.04112)* 3.1051 (1.4079)*
CO2 Emission Negative -0.0217 (0.0326)** -0.3983 (0.1087)**
Sales Growth Positive 0.3462 (0.0220) 1.4291 (0.7039)
Size ---- 0.2364 (0.0096)** 0.2265 (0.3287)***
Leverage Negative -0.3659 (0.0259)** -0.1634 (0.8971)**
Cap. Intensity Negative -0.2351 (0.0062) -0.2956 (0.1979)
Firm Effect Yes Yes
Year Effect Yes Yes
Wald – χ2 202.3896** 204.6423**
Sargan Test (p-value) 0.4356 0.4943
AR (1) p – value 0.0923 0.0732
AR (2) p – value 0.2956 0.2678
Notes: Significant Level *: 5%, **: 1%, ***: 10%
S o u r c e : author’s calculations.
Conclusion and implicationsConclusion and implications
Sustainable development goals, as prescribed by the United Nations, are high-
ly concerned with the environmental impact of business operations, especial-
ly emission of CO2. In the given context, present research examines the rela-
tion between CO2 emission and market value of the firm. Using unbalanced
panel data of Indian firms for a period of seven years (2013–2019), the study
analyses the effect of carbon emission on Tobin’s Q ratio and market to book
value ratio. Multiple regression along with GMM estimation has been adopted
for data analysis. The results indicate strong negative impact of carbon emis-
sion on both measures of market value for selected companies. In other words,
higher level of emission of CO2 will result into lowering the market value of
company. It can be explained as shareholders perceive carbon emission as ad-
verse signal and ref lect the same by negative effect on market price of shares.
Rajesh Desai, Avani Raval2222
Besides, leverage and asset size are also found to be significant determinants
of firm value.
Present research findings have important implications for practitioners.
First, managers can adopt ‘green’ business practices that assist in reducing
carbon discharge. Further, by adopting environment-friendly practices, firm
value may be augmented as investors attach positive signal to such announce-
ments (Kumar & Firoz, 2019; Smale et al., 2006). Second, as shareholder con-
sider emission as important information, firms should disclose their CO2 data
publicly so that they can win the trust of investors. Though current research
attempts to provide comprehensive view on carbon emission and financial per-
formance, few limitations are encountered. First, as emission disclosure norms
are not mandatory in India, present research is based on CDP India firms. Sec-
ondly, similar research can be conducted using cross-country data to study the
difference in the developed and emerging nations.
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