Net zero pledges have become all the rage in Corporate America. Big banks, steel companies and even (mostly European) oil companies are pledging to wipe out their carbon emissions over time.
Cynics may see these environmental announcements as mere marketing ploys designed to win brownie points from climate-nervous consumers. But there may be another force at play: keeping Wall Street happy.
New research suggests that investors really do care about these climate goals and crave transparency about the carbon footprints of the companies they back.
That’s especially true in the dirtiest sectors: energy, utilities and industrials. While those three sectors make up less than 15% of the S&P 500’s market value, they account for a staggering 70% of direct and indirect emissions, according to Bank of America.
And within those heavy emitting sectors, the companies that have set net zero target dates trade at a “significant premium” to those that have not, Bank of America found.
And now companies are increasingly doing just that. US Steel pledged Wednesday to reach net-zero carbon emissions by 2050 by using electric arc furnaces, carbon-free energy sources and carbon capture …