Companies that ignore energy efficiency and environmental policies could see their share price drop if the price of fossil fuel rises, new research has revealed
Anant Sundaram, a finance professor from the Tuck School of Business in Dartmouth, New Hampshire, analysed the top 500 US companies to understand the impact of fossil fuel price swings on a company’s share price.
He found that companies with no environmental policies or strategies such as fuel efficient company cars and targets to reduce energy use by employees see their share price drop if oil and gas prices increase.
But with the right policies on energy efficiency, even fuel-heavy industries can ‘de-couple’ the link between fuel price volatility and a movement in share prices, meaning their share price won’t drop if there is a spike in the price of oil.
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