Contents

Corporate Climate Litigation as Strategic Risk: Stock-Market Evidence from Filings and Court Decisions Against Listed Firms (2005–2021)

Author(s): Anne Vernez Moudon1, Rebelo E. M.2
1Deaprtment of Urban Design and planning , University of Washington, Seattle, WA 98105, United States
2CITTA – Research Centre for Territory Transports and Environment, Faculty of Engineering, University of Porto, Porto, Portugal
Anne Vernez Moudon
Deaprtment of Urban Design and planning , University of Washington, Seattle, WA 98105, United States
Rebelo E. M.
CITTA – Research Centre for Territory Transports and Environment, Faculty of Engineering, University of Porto, Porto, Portugal

Abstract

Climate litigation has become a material governance mechanism that can affect strategy, disclosure, and long-horizon planning. This article examines whether equity markets price climate litigation as value-relevant information for publicly listed defendants. We assemble a cross-regional sample of corporate climate lawsuits against listed North American and European firms over 2005–2021 using the Sabin Center climate litigation databases (with contributions from the London School of Economics), yielding 279 filing firm-events and 78 decision firm-events. Using a standard event-study design, we estimate cumulative average abnormal returns around litigation filings and judicial decisions. The estimates indicate a negative market response at filing (a 3-day cumulative average abnormal return of \(-0.35%\)) and a larger negative response after unfavourable decisions (\(-0.99%\)). Effects are stronger among “Carbon Major” defendants and for novel or first-in-jurisdiction filings, although narrower subsample results are interpreted cautiously. Taken together, the evidence supports climate litigation as a managerial and planning-relevant risk channel with implications for enterprise risk management, transition planning, governance, and investor communication.

Copyright © 2024 Anne Vernez Moudon, Rebelo E. M.. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Cite this Article

APA
Moudon, A., M., R. (2024). Corporate Climate Litigation as Strategic Risk: Stock-Market Evidence from Filings and Court Decisions Against Listed Firms (2005–2021). Journal of Management and Planning Research, 1(1), 170-179. https://doi.org/10.66033/jmpr2024-115
MLA
Moudon, Anne Vernez, and Rebelo E. M.. "Corporate Climate Litigation as Strategic Risk: Stock-Market Evidence from Filings and Court Decisions Against Listed Firms (2005–2021)." Journal of Management and Planning Research, vol. 1, no. 1, 2024, pp. 170-179.
Chicago
Moudon, Anne Vernez. "Corporate Climate Litigation as Strategic Risk: Stock-Market Evidence from Filings and Court Decisions Against Listed Firms (2005–2021)." Journal of Management and Planning Research 1, no. 1 (2024): 170-179. https://doi.org/10.66033/jmpr2024-115
Harvard
Moudon, A., M., R., 2024. Corporate Climate Litigation as Strategic Risk: Stock-Market Evidence from Filings and Court Decisions Against Listed Firms (2005–2021). Journal of Management and Planning Research, 1(1), pp.170-179.
Vancouver
Moudon A, M. R. Corporate Climate Litigation as Strategic Risk: Stock-Market Evidence from Filings and Court Decisions Against Listed Firms (2005–2021). Journal of Management and Planning Research. 2024;1(1):170-179.