The Impact of Dow Jones Sustainability Index, Exchange Rate and Consumer Sentiment Index on Carbon Emissions

The objective of this study is to examine, over the last 20 years, short-run and long-run effect on global carbon dioxide (CO2) emissions stock returns, exchange rates consumer confidence. Stock markets contribute environmental degradation; as a result, we employed, for first time, Dow Jones Sustainability World Index use returns socially responsible companies. euro US dollar rate used, forex market largest financial considers it major pair. Consumer Sentiment used proxy confidence, since behavior is, also, considered factor linked degradation. basic testing procedures employed include Augmented Dickey–Fuller stationarity test, cointegration analysis Vector Error Correction Model (VECM). results establish that companies listed exert significant negative (positive) impact CO2 in short (long) term. inverse, i.e., positive (negative) run holds both other variables, consumers’ confidence rates. From outcomes obtained, policy initiatives could assist mitigate degradation are recommended.