Does corporate carbon performance converge in the global market? Evidence from a distribution dynamic approach.

Converging corporate carbon performance (CCP) to a higher level is necessary to achieve the global goal of controlling temperature rise. However, it remains uncertain whether all international firms endeavour to improve CCP. Using a panel of 19,913 public companies from 76 countries during the 2010-2019 period and two visual tools of the distribution dynamics approach, we conduct a nascent analysis of transitional dynamics and the long-run evolution of CCP. We find that regardless of investigated period (before and after Paris Agreement) and regional location, most firms converge towards the highest CCP of 10, thereby improving carbon performance over time. After Paris Agreement, the convergence to the top CCP is more significant, whereas more companies cluster around the mediocre CCP (a value of 6.7), thus evidencing an increased heterogeneity in convergence paths. Firms from East Asia & Pacific and the North American regions drive such heightened heterogeneity. Specifically, enterprises from East Asia & Pacific show the least convergence towards the highest CCP, probably because more manufacturing firms in the region primarily rely on fossil fuels and face loose environmental regulations. Therefore, further improving CCP may require substantial investments in equipment upgrades and would result in significantly higher costs. For North America, the results can be associated with Donald Trump's policy towards climate change and bid to withdraw from the Paris Agreement, reflecting firms taking a Republican stand, most likely diverging to mediocre CCP and experiencing a decline in future carbon management. The observed convergence towards the highest CCP is nearly twice as significant among firms from OECD than non-OECD countries, which aligns with global enterprises outsourcing emissions to developing countries. The study reveals the pattern of strong convergence to the highest CCP in the global firms as evidence of collective efforts in the transition to net zero. However, divergence and increased heterogeneity may occur in some regions due to politics, industrial structure and regulations.

Does supplier concentration matter to investors during the COV1D-19 crisis: evidence from China?

The literature shows that investor attention to customer-supplier disclosure increases when suppliers' information arrival is anticipated. Due to the widespread of city lockdowns in China and the implementation of social distancing to control the COVID-19 pandemic, investor attention to potential disruption of the supply chain spikes, leading to a price devaluation for firms with high supplier concentration risk. We find that a higher degree of supplier concentration is related to more serious stock price declines over the short-term and medium-term windows right after the Wuhan lockdown. This result lends support to the argument that the concentration risk of suppliers is a significant consideration for China stock market investors, especially under the potential financial distress at the firm level induced by the COVID-19 crisis.

The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China.

We examine the role of ESG performance during market-wide financial crisis, triggered in response to the COVID-19 global pandemic. The unique circumstances create an inimitable opportunity to question if investors interpret ESG performance as a signal of future stock performance and/or risk mitigation. Using a novel dataset covering China's CSI300 constituents, we show (i) high-ESG portfolios generally outperform low-ESG portfolios (ii) ESG performance mitigates financial risk during financial crisis and (iii) the role of ESG performance is attenuated in 'normal' times, confirming its incremental importance during crisis. We phrase the results in the context of ESG investment practices.