Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2022
  • Working Paper
  • HBS Working Paper Series

Climate Solutions Investments

By: Alex Cheema-Fox, George Serafeim and Hui (Stacie) Wang
  • Format:Print
  • | Language:English
ShareBar

Abstract

An increasing number of companies are providing products and services that help reduce carbon emissions in the economy. We develop a methodology to identify those companies and create a sample of publicly listed climate solutions companies allowing us to study their geographic composition, accounting fundamentals, valuation ratios, and stock performance over time. The sample is equally split between developed and emerging markets with more companies located in China rather than the US or the EU. A portfolio of climate solutions companies exhibits higher revenue growth, higher investments in research and development, and talent and lower profitability margin. The portfolio exhibits superior stock market performance since 2018, driven by solutions in energy, fuels, battery, and transportation. Finally, the portfolio’s returns exhibit very little correlation with the returns of portfolios that seek to reduce their carbon emissions by underweighting high carbon emission companies, suggesting that climate solutions portfolios are distinct from low carbon emission indices.

Keywords

Decarbonization; Climate Finance; Climate Impact; Climate Risk; Environment; Sustainability; Carbon Emissions; Electric Vehicles; Energy; Renewables; Climate Change; Investment; Environmental Sustainability; Renewable Energy; Transportation Industry; Food and Beverage Industry; Energy Industry; Industrial Products Industry; China; United States; Asia; Europe

Citation

Cheema-Fox, Alex, George Serafeim, and Hui (Stacie) Wang. "Climate Solutions Investments." Harvard Business School Working Paper, No. 22-054, January 2022.
  • SSRN
  • Read Now

About The Author

George Serafeim

Accounting and Management
→More Publications

More from the Authors

    • March 2022
    • Faculty Research

    Sustainable Product Management at Solvay

    By: George Serafeim
    • 2022
    • Financial Analysts Journal

    Which Corporate ESG News Does the Market React To?

    By: George Serafeim and Aaron Yoon
    • January 2022
    • Accounting Review

    Why Is Corporate Virtue in the Eye of the Beholder? The Case of ESG Ratings

    By: Dane Christensen, George Serafeim and Anywhere Sikochi
More from the Authors
  • Sustainable Product Management at Solvay By: George Serafeim
  • Which Corporate ESG News Does the Market React To? By: George Serafeim and Aaron Yoon
  • Why Is Corporate Virtue in the Eye of the Beholder? The Case of ESG Ratings By: Dane Christensen, George Serafeim and Anywhere Sikochi
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College