Climate Performance and Firm Valuation: A Meta-Analysis of Tobins Q in the Post-IPCC AR6 Era
subject: climate performance; climate risk; firm valuation; meta-analysis; sustainable finance; Tobins Q
description: This study examines whether corporate climate performance is reflected in firm valuation by synthesising recent empirical evidence, using Tobins Q as a forward-looking indicator of market expectations. Employing a random-effects meta-analysis of 30 peer-reviewed studies published between 2020 and 2025 across multiple industries and regions, the findings reveal a modest yet statistically significant positive association between stronger climate performance and higher market valuations, suggesting that investors increasingly incorporate climate-related information into firm pricing. Contrary to prevailing assumptions in the literature, proactive climate strategies, such as emissions-reduction initiatives, do not systematically generate greater valuation benefits than disclosure-oriented approaches; both exhibit comparable positive effects. Similarly, valuation outcomes do not differ materially between self-reported and externally verified climate data. Meta-regression analysis identifies data source as the only statistically significant moderator, although its influence remains nuanced. Overall, the results indicate that climate performance enhances firm valuation in a context-dependent manner, challenging the view that only proactive strategies or externally verified data are uniquely rewarded by financial markets. The study contributes to the sustainable and corporate finance literature by clarifying how capital markets price climate-related corporate behaviour under heterogeneous strategic responses. 2026 by the authors.
creator: Akanksha, Akanksha; Manickam, Thirupathi
source: Journal of Risk and Financial Management;Volume;19;Issue;2;Article No.;112;
publisher: Multidisciplinary Digital Publishing Institute (MDPI)
date: 01-01-2026
rights: All Open Access; Hybrid Gold Open Access
relation: ISSN: 19118066;
format: online
language: English
type: Article
coverage: Akanksha A., Department of Commerce, Christ University, Bengaluru, 560073, India; Manickam T., Department of Professional Studies, Christ University, Bengaluru, 560073, India