HKS Authors

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Donald Trump’s election and his nomination of Scott Pruitt, a climate skeptic, to lead the Environmental Protection Agency drastically downshifted expectations on US climate-change policy. We study firms’ stock-price reactions and institutional investors’ portfolio adjustments after these events. As expected, carbon-intensive firms benefited. Should not companies with responsible strategies on climate change have lost value, since they were paying for actions that were now less urgent? In fact, investors actually rewarded such firms. The premium the firms received resulted, at least in part, from the move into climate-responsible stocks by long-horizon investors presumably expecting a post-Trump rebound to green policy.


Ramelli, Stefano, Alexander F. Wagner, Richard J. Zeckhauser, and Alexandre Ziegler. "Stock Price Rewards to Climate Saints and Sinners: Evidence from the Trump Election." HKS Faculty Research Working Paper Series RWP18-037, September 2018.