Taxonomy alignment correlated with higher stock returns: Publication in the Journal of Banking and Finance

30. Januar 2025

A new study by Professor Kerstin Lopatta and Professor Alexander Bassen (Co-authored by Othar Kordsachia and Weiqiang Tan) finds that companies that are highly compliant with the EU Taxonomy Regulation (TR), which classifies environmentally sustainable activities, achieve significantly higher stock returns than companies that are less compliant. This effect is particularly strong in developed markets and highlights a "Taxonomy alignment premium," as investors redirect capital toward companies demonstrating green compliance. The study assesses the degree of alignment between corporate revenues and the TR using an estimated dataset developed by FTSE Russell. Additionally, extending the analysis to include hand-collected disclosed values under the TR further validates the robustness of the findings. The study, published in the Journal of Banking and Finance, was highlighted by the responsible investor as one of the first studies to provide evidence on the impact of the EU Taxonomy Regulation on capital markets.

You can download the full study here or read the article of the responsible investor following this Link.