Firm Commitments

A growing fraction of companies globally have made commitments to reduce their carbon emissions by a certain date. Whereas the companies that make commitments subsequently reduce their emissions, the effect on overall emissions of companies (including those that do not commit) has been small. The companies that commit and those that make the most ambitious commitments tend to have lower emissions; firm commitments are less prevalent in countries where governments have made national commitments. Overall, the commitment movements have been successful in drawing the willing but have found greater resistance from the companies that most need to reduce their emissions. This paper was accepted by Caroline Flammer, sustainability. Funding: This work was supported by Horizon Europe Climate, Energy and Mobility [Grant ERC-AG 885552] from the European Research Council (ERC) under the ERC Advanced Grant program “Investors and Climate Change.” Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.07298 .