Do Carbon Management System Adoption Announcements Affect Market Value?

In this paper we conduct an event study to test the hypothesis that carbon management systems (CMS) are perceived by financial markets to be value-adding IS investments worth more than their costs. After populating a list of over 200 exchange-traded CMS adopters, we search newswires and specialty news outlets to identify 62 adoption announcements over a 10 year period. These are analyzed for a 3 day window starting with the announcement and we find that the mean cumulative abnormal returns (MCARs) from CMS announcements are 1.04%. A sub-analysis by firm size confirms earlier IS research results that smaller firms experience larger returns. Another sub-analysis by industry finds a potentially surprising result that lower-C02 emission industries accrue larger MCARs than high-emitting industries, though further research will be required to establish this conclusively.