Events

Prof. Zheng WANG
Associate Professor, Department of Accountancy
City University of Hong Kong

In this study, we investigate the sentiment of the general public towards firms’ carbon emissions by utilizing social media sentiment scores obtained from Thomason Reuters’ MarketPsych Indices. First, through an association analysis, we demonstrate that firms with high Scope 1 (direct) carbon emission garner more negative sentiment on social media platforms, particularly when those firms possess a high level of visibility and when the public has heightened concerns over climate change. Furthermore, we conduct an event study to establish that the disclosure of high levels of Scope 1 carbon emissions can trigger a negative sentiment reaction toward the firm on social media platforms. The effect is also stronger among firms with greater visibility and during periods when climate change garners increased public attention. Moreover, our findings reveal that firms with high Scope 1 carbon emissions exhibit a reduction in carbon emissions in the future and suffer adverse product market consequences if they experience negative sentiment on social media. Collectively, our results suggest that high carbon emitters are subject to reputational and product market consequences, and social media may play a role in disciplining firms’ carbon emission behaviour.