Journal article
Corporate net zero transition and financing cost: evidence of impact from the global energy and utilities sectors
- Abstract:
- We study whether the net zero transition (NZT) affects loan pricing in the energy and utilities sectors of the loan market. We find that firms with higher levels of overall NZT disclosure experience a lower cost of debt in the loan market, controlling for loan-specific and firm financial characteristics. This effect is economically and statistically significant in Europe, but not in North America or emerging markets, and becomes more pronounced after the 2015 Paris Agreement. We also identify relevant NZT actions contributing to such a relation. Firms disclosing clear emission reduction targets aligned with the Paris Agreement enjoy lower loan spreads. Additionally, environmental R&D expenditure and improved energy efficiency policies are associated with lower loan spreads. Moreover, effective governance actions, such as environmental management training and ESG-linked executive compensation, help mitigate climate risks and lower loan spreads.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
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(Preview, Version of record, pdf, 1.1MB, Terms of use)
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(Preview, Supplementary materials, pdf, 298.7KB, Terms of use)
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- Publisher copy:
- 10.1007/s10640-026-01101-5
Authors
- Publisher:
- Springer
- Journal:
- Environmental and Resource Economics More from this journal
- Volume:
- 89
- Issue:
- 8
- Article number:
- 49
- Publication date:
- 2026-07-20
- Acceptance date:
- 2026-07-09
- DOI:
- EISSN:
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1573-1502
- ISSN:
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0924-6460
- Language:
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English
- Keywords:
- Pubs id:
-
2090516
- Local pid:
-
pubs:2090516
- Source identifiers:
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W7169789199
- Deposit date:
-
2026-07-21
- ARK identifier:
Terms of use
- Copyright holder:
- Zhou et al.
- Copyright date:
- 2026
- Rights statement:
- © The Author(s) 2026. Open Access. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits 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 licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.
- Licence:
- CC Attribution (CC BY)
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