Stringency of Family Firms and Owner-Managers in the Transition to Low-Carbon Emissions

Authors

• Morten Bennedsen, University of Copenhagen
• John Doukas, Old Dominion UniversityFollow
• Halit Gonenc, University of Groningen

Document Type

Article

Publication Date

2026

DOI

10.1016/j.ecolecon.2026.108997

Publication Title

Ecological Economics

Volume

246

Pages

108997

Abstract

This study examines the relationship between carbon emissions and stock returns, with a focus on the role of family ownership and management. Using a sample of 435 publicly listed firms from 14 Western European countries over the period 2010–2020, we explore whether financial markets perceive family-controlled firms, particularly those led by family-member CEOs, differently in terms of their commitment to sustainable practices. Consistent with prior research, our results indicate that firms with higher emissions earn higher stock returns while simultaneously experiencing lower market valuations, consistent with the presence of a carbon risk premium driven by elevated carbon transition risk. Crucially, we find that family firms led by family CEOs experience significantly greater carbon risk premiums and more pronounced valuation discounts compared to non-family firms and family firms led by professional CEOs. This differential is particularly pronounced in the period following the 2015 Paris Agreement, which heightened investor awareness of climate-related risks. This evidence is consistent with investors exhibiting lower confidence in the effectiveness of carbon transition risk management in family firms led by family CEOs. We attribute these findings to weaker governance, lower institutional oversight, and control-driven decision-making. This study advances the literature on ownership structure by elucidating how family control influences corporate responses to environmental pressures and by highlighting the financial implications of delayed climate action in family-controlled businesses.

Rights

© 2026 The Authors.

This is an open access article under the Creative Commons Attribution 4.0 International (CC BY 4.0) License.

Comments

Data availability statement: Article states: "Data will be made available on request."

Original Publication Citation

Bennedsen, M., Doukas, J., & Gonenc, H. (2026). Stringency of family firms and owner-managers in the transition to low-carbon emissions. Ecological Economics, 246, Article 108997. https://doi.org/10.1016/j.ecolecon.2026.108997

Repository Citation

Bennedsen, Morten; Doukas, John; and Gonenc, Halit, "Stringency of Family Firms and Owner-Managers in the Transition to Low-Carbon Emissions" (2026). Finance Faculty Publications. 59.
https://digitalcommons.odu.edu/finance_facpubs/59