Has Climate Change Even Impacted the Valuation of Companies? An Evidence from Gujarat Fluorochemicals Ltd. in India

Climate change is undeniably the major challenge of our times and poses a global threat to civilization. The present study attempts to analyze the shift in the environmental changes in the Indian chemical industry and to evaluate such an impact on the financial valuation and performance of the companies by investigating the case of one of the major players in the fluorochemical industry in India, Gujarat Fluorochemicals Ltd. (GFL). Employing Discounted Cash Flow Analysis, the study discovers that climate change in the form of increased carbon credits has positively impacted the financial valuation of GFL. The findings suggest that an increase of approximately 44% in the valuation of the GFL is owing to the revenue from the sale of the carbon credits as per the Kyoto Protocol.