Job Market Paper

Complement or Cover-Up? Understanding the Role of Carbon Credits in Corporate Climate Strategies, 

Committee Members: Khrystyna Bochkay (co-chair), Mark Maffett (co-chair), Fabrizio Ferri, Jeffrey Hales

Presentations: University of Miami, University of Tennessee, Knoxville, The Hong Kong Polytechnic University, The University of Hong Kong, 2023 MHBS PhD Research Competition, 2024 AAA/Deloitte Foundation/J. Michael Cook Doctoral Consortium,  2024 Graduate Research Accounting Conference at Emory, 2024 KAAPA PhD Conference, 2025 AAA Current Issues in Sustainability Conference

Abstract: This paper examines whether companies use carbon credits to substitute for internal emissions reduction efforts. Using U.S. firms' responses to the Carbon Disclosure Project (CDP) survey, I find a growing trend in voluntary carbon credit purchases, with the proportion among respondents rising from 13.1% in 2014 to 22.7% in 2021. Companies with climate-linked incentives and net-zero targets are more likely to buy credits. Lower polluters and those with less controllable Scope 3 emissions are more inclined to purchase them. Contrary to general concerns, credit purchasers demonstrate greater internal efforts than non-purchasers, with no evidence of reduced efforts within firms after credit purchases. These firms also show lower future emissions and more transparent climate disclosures. Overall, my findings suggest that companies use carbon credits to complement, not replace, direct emissions reduction efforts. Consistent with this, holding net emissions constant, climate-conscious investors do not invest less in companies using carbon credits.

Working Papers

Credible Disclosure or Mere Puffery? Empirical Evidence on the Voluntary Use of Sustainability Disclosure Standards, 

with Khrystyna Bochkay and Jeffrey Hales

Revising for 3rd round resubmission to The Accounting Review

Presentations: University of Miami, INSEAD*, Harvard University*, Boston University*, Cornell University*, Northeastern University*, University of Houston*, University of Hong Kong*, Nanyang Technological University*, 2023 LSU Regional Research Conference*, FIU Research Day*, Egyptian Online Seminars in Business, Accounting and Economics*, 2022 CARE conference*, 2023 HARC conference, 2023 FARS midyear meeting, 2024 ASFAAG American Chapter Conference (* Presented by co-author)

Coverage: Columbia Law School Blue Sky Blog, Podcast from Council of Institutional Investors, and the Effects Analysis for IFRS Sustainability Disclosure Standards

Abstract: In this paper, we examine the factors and outcomes linked to companies’ voluntary adoption of sustainability disclosure standards developed by the Sustainability Accounting Standards Board (SASB). We find that peer behavior, sustainability-focused institutional ownership, company size and performance are among the main determinants of reporting following SASB standards. Moreover, we find that the standards adoption is a highly persistent disclosure choice. In terms of outcomes, companies' adoption of SASB standards is associated with significant improvements in various sustainability outcomes including fewer sustainability-related violations, lower greenhouse gas emissions, and lower pollution levels. Collectively, these results inform our understanding of voluntary standards-based sustainability reporting and associated performance effects of such disclosure commitment.

Do Investors Respond to Mechanical Changes in ESG Ratings?, 

with Fabrizio Ferri and Daniele Macciocchi

Revising for 2nd round resubmission to Management Science

Presentations: University of Miami, 2023 Florida Accounting Symposium, 2024 MHBS Doctoral Student Poster Presentation Competition, 2024 AAA Annual Meeting, 2025 FARS midyear meeting

Abstract: Using a quasi-experimental setting, we study whether investors respond to a purely mechanical change in ESG ratings—i.e., a change independent of concurrent changes in firms’ actual ESG activities. We find that when a firm experiences a mechanical increase in ESG ratings, the probability of being selected by an ESG fund increases (extensive margin). In contrast, if the firm is already in the fund’s portfolio, its holdings do not change (intensive margin), consistent with portfolio weighting being based on market capitalization. The selection effect is observable not only among funds that follow an ESG index but also among active ESG funds, which presumably should have the incentives and ability to identify and filter out the mechanical increase in ESG ratings. Among active ESG funds, the selection effect is stronger for funds with less assets under management (AUM), larger portfolios of firms, and lower expense ratios, consistent with the notion that resource constraints may impede a fund’s screening ability. Our findings imply that passive investing based on commercial ESG ratings—whether due to resource constraints or portfolio indexing—might result in portfolio allocations that do not reflect the actual ESG activities of firms.