Abstract: Enterprises are the main body of action to achieve the goal of carbon peak and carbon neutrality, and the emission reduction commitment provides an important reference for investors to observe the future emission reduction situation of enterprises. However, the existing studies mainly focus on the historically disclosed information, such as ESG and CSR, ignoring the impact of forward-looking information such as emission reduction commitment on enterprise evaluation. Based on this, the relationship between emission reduction commitment and stock return is investigated by taking Chinese enterprises that publicly disclosed questionnaires in CDP as samples. The results show that enterprises’ emission reduction commitments can effectively reduce the stock return required by investors, and reveal the enabling effect of emission reduction commitment on market valuation. The analysis of the mechanism and heterogeneity reveals that the emission reduction commitment can affect stock returns by providing future incremental information, alleviating information asymmetry and reducing corporate risks. And the degree of the impact varied with the intensity of regional environmental regulations, the level of corporate carbon emissions and the confidence level of such commitments. Further study reveals that the emission reduction commitments of enterprises have industrial spillover effects, which can significantly improve the level of information disclosure of the emission reduction commitment of the competitors in the same industry. The analysis of the economic consequences reveals that the emission reduction commitment can not only effectively constrain the subsequent emission reduction behavior of enterprises, but also help to expand the scale of subsequent equity financing with the reduced capital costs brought about by the emission reduction commitment. Therefore, the management should actively disclose the emission reduction commitment, so as to keep its word and keep its promise. The government departments should also standardize information disclosure standards and give full play to the valuation role of the forward-looking information in the capital markets.

Key words: emission reduction commitments, stock returns, market valuation