@techreport{fecd1b212e3d409bba9a76168d7c5b2d,
title = "Carbon disclosure, emission levels, and the cost of debt",
abstract = "In this paper, we investigate the effect of voluntary carbon emissions disclosure on the cost of debt of publicly listed firms. Using a unique and comprehensive database on carbon emissions from CDP (formerly {\textquoteleft}The Carbon Disclosure Project{\textquoteright}), we study whether firms which choose to voluntarily disclose their carbon emissions enjoy more favorable lending conditions - in the form of lower spreads on their bank loans - than their non-disclosing counterparts. Our empirical results reveal a significant and negative relation between voluntarily disclosing carbon emission levels and the cost of bank loans for informationally opaque borrowers. Furthermore, we find that higher industry- and firm-size-adjusted carbon emissions have a positive and significant effect on loan spreads. These effects are common to all loans and not limited to loans which have been arranged by norms-constrained lenders suggesting that spread premia are driven by environmental risks rather than investor preferences.",
author = "S. Kleimeier and P.M. Viehs",
year = "2016",
month = jan,
day = "1",
doi = "10.26481/umagsb.2016003",
language = "English",
series = "GSBE Research Memoranda",
publisher = "Maastricht University, Graduate School of Business and Economics",
number = "003",
address = "Netherlands",
type = "WorkingPaper",
institution = "Maastricht University, Graduate School of Business and Economics",
}