Climate Performance and Firm Valuation: A Meta-Analysis of Tobin’s Q in the Post-IPCC AR6 Era

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Authors: Akanksha Akanksha, Thirupathi Manickam
Cited by: 1
References: 86

Abstract

This study examines whether corporate climate performance is reflected in firm valuation by synthesising recent empirical evidence, using Tobin’s Q as a forward-looking indicator of market expectations. Employing a random-effects meta-analysis of 30 peer-reviewed studies published between 2020 and 2025 across multiple industries and regions, the findings reveal a modest yet statistically significant positive association between stronger climate performance and higher market valuations, suggesting that investors increasingly incorporate climate-related information into firm pricing. Contrary to prevailing assumptions in the literature, proactive climate strategies, such as emissions-reduction initiatives, do not systematically generate greater valuation benefits than disclosure-oriented approaches; both exhibit comparable positive effects. Similarly, valuation outcomes do not differ materially between self-reported and externally verified climate data. Meta-regression analysis identifies data source as the only statistically significant moderator, although its influence remains nuanced. Overall, the results indicate that climate performance enhances firm valuation in a context-dependent manner, challenging the view that only proactive strategies or externally verified data are uniquely rewarded by financial markets. The study contributes to the sustainable and corporate finance literature by clarifying how capital markets price climate-related corporate behaviour under heterogeneous strategic responses.

Fields of Study & Subjects

Corporate Social Responsibility Reporting Auditing Earnings Management Governance Sustainable Finance and Green Bonds

Publication details

Journal / source
Journal of risk and financial management
Publisher
MDPI AG
Volume
19
Issue
2
Pages
112–112
Publication date
3 February 2026
Language
EN