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Finance Seminar

Friday, October 22, 2021
4:00pm to 5:00pm
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Baxter Lecture Hall
Firm Commitments
Patrick Bolton, Barbara and David Zalaznick Professor of Business, Graduate School of Business and Department of Economics, Columbia University,

Abstract: We provide a first empirical analysis of firm commitments to reduce their carbon emissions. A growing fraction of publicly traded companies around the world have already voluntarily made commitments to attain reductions in their emissions by a certain date or to reduce the emission intensity of their activities. What drives companies to make such commitments and what are their effects? We explore two major commitment movements, the carbon disclosure project (CDP), and the science-based target initiative (SBTi). Our main findings are, first that while the companies that make commitments subsequently further reduce their emissions, the effect of these commitment initiatives on overall emissions of publicly traded companies (including those that do not commit) has been small. Second, the companies that agree to commit, and those that make the most ambitious commitments, tend to be companies with lower carbon emissions. Third, firm commitments to reduce emissions are less prevalent in countries where governments have made national commitments. Overall, the movements to get companies to commit have been successful in drawing in the willing but have found greater resistance from the companies that need to reduce their emissions the most.

Please note, this seminar is limited to a Caltech audience at this time.

For more information, please contact Sabrina Hameister by phone at 626-395-4228 or by email at