Name
Global Environmental Awareness and the Climate Risk of Corporate Mergers and Acquisitions
Date & Time
Monday, July 6, 2026, 8:55 AM - 9:20 AM
Description

This study uses the Paris Agreement as a proxy for global environmental awareness to examine its impact on US firms’ attention to climate risk, particularly when facing potential pressure from corporate customers in high-carbon-emission industries. We measure firms’ attention to climate risk through the degree of climate-related content in U.S. suppliers’ M&A deal announcements captured in their press releases. Using a difference-in-difference analysis, we find that, following the Paris Agreement, acquirers with high-emission customers experience a significantly greater increase in climate risk considerations, but not innovation, in their M&A deals compared to those with low-emission customers. Additionally, M&As with higher degrees of climate risk are associated with worse post-merger operating performance for acquirers with high-emission customers than those with low-carbon emission customers. By engaging in M&As dealing with higher climate risk, firms with high-carbon-emission customers can demonstrate their efforts to reduce climate risk to customers, which shows positive investor reactions and long-term value creation compared to counterparties.

Chia-Hsiang Weng
Keywords
Mergers and Acquisitions; Supply-Customer; Carbon Emissions; Climate Risk; Paris Agreement
Theme
CORPORATE FINANCE
Author 1
Yenn-Ru Chen
Author 2
Tse-Jen Lu
Author 3
Chia-Hsiang Weng
Author 4
Ya-Han Yang