This dissertation was written as part of the MSc in International Accounting, Auditing and Financial Management at the International Hellenic University. Pollution and climate change are words which we listen every day and are connected with our survival on this planet. This study focuses on the association between firm value and the carbon emissions in a sample of 200 companies in the United Kingdom. According to the majority of the previous literature, this relationship is negative; e.g. Baboukardos (2019) finds that is decreasing because the new regulation gives the sign to investors that the future emissions will be reduced. The collected observations are 1000 with firms from different sectors. Using all observations the results show us a positive relationship between the two variables. This is probably due to the different characteristics of firms in Financial Services sector. After excluding these firms we find a negative association between the carbon emissions and firm value. In this study the average penalty for every thousand of CO2 metric ton is £618,000.
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