The Impact of Carbon Targets on Firms' Carbon Performance

2025/08/07 by Sun, Xichen, Jia, Xingzhi, Oliva, Rogelio
#Applications (stat.AP) #FOS: Computer and information sciences

paper · doi:10.48550/arxiv.2508.05811

Abstract

Although goal-setting theory predicts that a challenging and specific goal can improve performance, the evidence regarding the effectiveness of an environmental goal in organizations is mixed. Using a panel data set consisting over 700 global firms across multiple industries, we apply a Difference-in-Differences (DiD) strategy and empirically analyze the effect of having science-based carbon emissions targets (SBTs) on firms' carbon performance. The findings in this study contribute to the debate regarding the necessity of setting SBTs.

Citations

• How institutional pressures and managerial incentives elicit carbon transparency in global supply chains
• Difference-in-differences with variation in treatment timing
• Building a practically useful theory of goal setting and task motivation: A 35-year odyssey.
• The competitive determinants of a firm's environmental management activities: Evidence from US manufacturing industries

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