2025
Working Paper
HBS Working Paper Series

An Empirical Examination of Business Climate Alliances: Effective and/or Harmful?

By: Matteo Gasparini and Peter Tufano

Format:Print
| Language:English
| Pages:74

Abstract

This research studies business alliances that seek to address climate change, offering empirical evidence to address claims advanced by alliance supporters and critics. We study eleven major alliance mostly focused on financial services firms and 424 major publicly-traded financial institutions–some of which joined these alliances. We use diff-in-diff and other approaches to identify the effects of alliance membership and to study "booster", network, and peer effects. Financial service firms that join climate alliances show increased adoption of climate-aligned management practices; greater adoption of emissions targets; reductions of own-emissions; mixed evidence of increased funding for green projects; and greater pro-climate lobbying. We find no evidence of traditional antitrust violations in the form of pricing power or market concentration; no reduction in funding to oil and gas companies; and no lower risk-adjusted shareholder returns than non-alliance members. We find that participation in multiple alliances ("booster effects") is correlated with adoption of practices, emission targets, emissions reductions, and pro-climate lobbying–albeit with diminishing returns; and we find some evidence of network and peer effects.