The Effects of Mutual Fund Decarbonization on Stock Prices and Carbon Emissions

Martin Rohleder, Marco Wilkens, Jonas Zink

2021 | Academic | Decarbonization, Divestment, Funds, Risk & Performance

This study seeks to determine whether mutual fund decarbonization affects the stock prices of divested firms and contributes to the reduction of these firms’ carbon emissions. We find that high DSP (decarbonization selling pressure) sustainably pressures stock prices downwards. Furthermore, we find that divested firms experiencing a stock price decline subsequently reduce their carbon emissions compared to non-divested firms.