Conference Agenda

Corporate commitments to achieve net zero greenhouse gas emissions by mid-century have proliferated rapidly in recent years. These represent a novel form of corporate climate target, requiring deep decarbonisation under long horizons, uncertainty, and emissions outside firms’ direct control. This paper examines whether adopting long-term net zero commitments is associated with observable changes in corporate climate action in the near term. We overcome measurement challenges by combining multiple datasets on emissions and climate governance, including several novel measures, and we exploit staggered variation in adoption timing using difference-in-differences methods with matching to address selection into treatment. We find little evidence of large or immediate reductions in emissions or of broad shifts in climate governance following adoption. At the same time, emissions estimates are generally negative and consistent with gradual reductions, and we observe selective improvements in more demanding, strategic management practices that often begin prior to formal adoption. These patterns are most apparent among early adopters. Overall, the results suggest that long-term net zero commitments are neither purely symbolic nor immediately transformative, but are embedded within a gradual process of organisational change, with implications for how such commitments are interpreted and designed to support near-term action.

Voluntary climate initiatives such as the Science-Based Targets initiative (SBTi) have emerged as prominent tools for corporate greenhouse gas (GHG) mitigation. While SBTi participation has been linked to reductions in firms’ operational emissions (Scopes 1 and 2), its broader impacts on supply chains—where a large share of emissions reside—remain underexplored. This study investigates whether private-sector climate leadership induces emissions reductions among suppliers or instead displaces costs downstream. Using a global panel dataset comprising 5,728 customer firms and 4,974 suppliers from 2010 to 2024, we apply a staggered difference-in-differences framework to evaluate the causal impact of SBTi adoption. We find that while SBTi-validated firms reduce their operational emissions by approximately 15.6%, they do not generate statistically significant emissions reductions among their suppliers. Instead, these firms restructure their supply chains by expanding their supplier base and shifting toward smaller, lower-bargaining-power vendors. As a result, suppliers experience a decline in financial performance, particularly in net profit margins, with more pronounced effects observed among smaller firms. Our findings highlight a structural limitation in current GHG accounting practices, particularly the use of spend-based Scope 3 estimations, which disincentivize direct supplier engagement. We propose several reforms, including the adoption of supplier-specific emission factors, alignment with financial disclosure standards, and supply chain financing mechanisms to support equitable mitigation. The study underscores the need for more integrated corporate climate strategies that address both environmental and financial sustainability across supply networks.

Empirical evidence and economic theory suggest multinational firms are more productive than their local counterparts. What explains the persistence of local firms and the recent surge in local content policies? Using a global database of corporate ownership changes for 35,567 commercial mines between 2000-2022, we test whether local firms have a comparative advantage in dealing with weak institutions, corruption, and conflict, which could attenuate or reverse the multinational advantage. We confirm that, on average, output declines by 8% after mines are taken over by local firms. Localized assets also exhibit higher air pollution, indicating lower operational quality. However, in states with weak governance, localization increases mine output by 8%. Local firms also generate more economic activity, urbanization, and non-agricultural employment around mines, indicating stronger local linkages. While multinational mining firms exhibit increasing returns to scale, local firms exhibit decreasing returns, suggesting they may grow based on their ability to navigate institutional weaknesses rather than their productivity. Results highlight the role of institutions in determining relative advantages of multinational versus local firms.

The voluntary carbon market (VCM) is built on the premise that one offset credit compensates one tonne of emissions. While a growing body of evidence has raised concerns about the environmental integrity of many credits, much less is known about how access to voluntary offsets affects firms’ incentives to reduce their own emissions. Using a buyer-linked transaction dataset covering the near-universe of voluntary carbon offset retirements, we exploit the 2023 market integrity scandals as a quasi-natural experiment to study this question. We find that firms that reduce or exit voluntary offsetting following the shock subsequently achieve larger reductions in operational emissions intensity than firms that continue to rely on offsets. This pattern persists under conservative assumptions about credit effectiveness and is consistent with a moral-licensing mechanism in which access to offsets weakens incentives for internal abatement. Beyond this behavioral channel, we document persistent oversupply, intermediary opacity, and sharp price and volume responses to integrity shocks in the VCM.