Arbeitspapier
Climate regulatory risks and corporate bonds
Investor concerns about climate and other environmental regulatory risks suggest that these risks should affect corporate bond risk assessment and pricing. We test this hypothesis and find that firms with poor environmental profiles or high carbon footprints tend to have lower credit ratings and higher yield spreads, particularly when their facilities are located in states with stricter regulatory enforcement. Using the Paris Agreement as a shock to expected climate risk regulations, we provide evidence that climate regulatory risks causally affect bond credit ratings and yield spreads. Accordingly, the composition of institutional ownership also changes after the Agreement.
- Language
-
Englisch
- Bibliographic citation
-
Series: Staff Report ; No. 1014
- Classification
-
Wirtschaft
Corporate Finance and Governance: Government Policy and Regulation
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
Financial Economics: General
- Subject
-
climate risk
regulatory risk
fixed income
- Event
-
Geistige Schöpfung
- (who)
-
Seltzer, Lee
Starks, Laura T.
Zhu, Qifei
- Event
-
Veröffentlichung
- (who)
-
Federal Reserve Bank of New York
- (where)
-
New York, NY
- (when)
-
2022
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Seltzer, Lee
- Starks, Laura T.
- Zhu, Qifei
- Federal Reserve Bank of New York
Time of origin
- 2022
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