How corporate venture capital firms respond to climate change

: impacts on ecological innovation outcomes

Abstract

In the scenario of combating climate change risks, the creation of disruptive technologies, through research and development, acquires a key role in contrasting the catastrophic effects predicted by the scientific community. This paper aims to understand whether and how corporate investors react to different types of climate change risk and opportunity exposure, through the in-house production of green patents. The sample consists of 87 U.S. corporate venture capital firms, with information spanning from 2001 to 2022. The results show that these players do react to general climate change exposure via green patent applications. The effect is even more powerful when climate change creates business opportunities for these companies. Conversely, an opposite effect is found on the number of non-green patent applications. Moreover, the analysis conducted using physical climate change exposure, allows us to capture a peculiar result. When it comes to dealing with short-term risk, the internal knowledge creation process takes a back seat, probably favouring investments in technologically advanced start-ups. The results of this paper, show how these firms can be an important player in the long-term battle against the consequences of climate change, providing eco-innovations necessary to lower our carbon footprint.

Date of Award	17 Oct 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Fátima Shuwaikh (Supervisor)