- Equity markets did not consistently react immediately after climate-related political or regulatory events. And, often, stock prices moved in the opposite direction of what was expected.
- Some of this lack of consistent reaction may be due to the protracted nature of the political decision-making processes. Markets may price in policy changes prior to their final adoption.
- When looking at stock-price returns over longer periods, we found that more carbon-efficient companies’ outperformance developed slowly over time and accelerated during the past two years.
MSCI
How Have Stocks Responded to Changes in Climate Policy?
