Proceedings of the 2025 7th International Conference on Economic Management and Cultural Industry (ICEMCI 2025)

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Do ESG Stocks Exhibit Abnormal Reactions to Environmental Events? Evidence from the 29th United Nations Climate Change Conference

Authors
Xiaoou Zhao1, *
1School of Management and Economics, The Chinese University of Hong Kong, Shenzhen, 518172, China
*Corresponding author. Email: 123090866@link.cuhk.edu.cn
Corresponding Author
Xiaoou Zhao
Available Online 3 December 2025.
DOI
10.2991/978-94-6463-888-2_47How to use a DOI?
Keywords
ESG stocks; abnormal reaction; environmental events
Abstract

This study examines the short-term financial market response to the 29th United Nations Climate Change Conference (COP29). Using an event study methodology and controlling for systematic risk factors with the Fama-French three-factor model, the research assesses whether stocks with different ESG profiles exhibit abnormal returns around the summit. The results indicate a lack of statistically significant abnormal returns across both high- and low-ESG stocks. However, a divergence in performance is observed, with ESG-aligned assets slightly underperforming compared to their low-ESG counterparts during the event window. This underperformance may reflect increasing investor skepticism toward climate conferences that yield few binding commitments. These findings suggest that markets may be becoming more selective in responding to climate policy events, reacting less to symbolic pledges without enforceable regulatory frameworks. The study contributes to the literature on ESG asset pricing by shedding light on the short-term effects of environmental policy events. It also highlights the evolving sensitivity of ESG returns to market context, political credibility, and the perceived materiality of policy outcomes.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 7th International Conference on Economic Management and Cultural Industry (ICEMCI 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
3 December 2025
ISBN
978-94-6463-888-2
ISSN
2352-5428
DOI
10.2991/978-94-6463-888-2_47How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Xiaoou Zhao
PY  - 2025
DA  - 2025/12/03
TI  - Do ESG Stocks Exhibit Abnormal Reactions to Environmental Events? Evidence from the 29th United Nations Climate Change Conference
BT  - Proceedings of the 2025 7th International Conference on Economic Management and Cultural Industry (ICEMCI 2025)
PB  - Atlantis Press
SP  - 482
EP  - 492
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-888-2_47
DO  - 10.2991/978-94-6463-888-2_47
ID  - Zhao2025
ER  -