Firms, oil shocks, and SBTi validation

: an empirical analysis of climate targeting and capital markt reactions

Abstract

This thesis “Firms, Oil Shocks, and SBTi Validation: An Empirical Analysis of Climate Targeting and Capital Markt Reactions” by Tom Sebastian Wallner investigates the determinants and capital market implications of Science Based Targets initiative (SBTi) certification among publicly listed firms in Europe and the United States. Despite the increasing relevance of science-based climate commitments, little is known about the firm-level drivers of SBTi validation or how such commitments are perceived by financial markets under conditions of systemic energy shocks. Using a comprehensive dataset of 3,281 firms, the first part of the analysis employs OLS regression to identify significant predictors of SBTi validation, including ESG scores, profitability, company size, and emissions intensity. The second part applies an event study methodology to assess whether SBTi-validated firms respond differently to systematic oil price shocks compared to their non-validated counterparts. The results show that SBTi-validated firms in Europe exhibit significantly weaker abnormal stock price reactions to both positive and negative oil shocks, suggesting a degree of short-term market resilience. Although this effect is less pronounced in the U.S. sample, the overall findings support the hypothesis that externally validated climate targets may serve as credible signals of reduced transition risk. This research contributes to the understanding of corporate climate strategy as both a governance mechanism and a financial signal.

Date of Award	16 Oct 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Tural Karimli (Supervisor)