Spotlighting energy sector through green transition attention

Environmental concerns are increasingly shaping investment strategies in the energy market. Although the energy transition offers various opportunities, a full shift to a net-zero emissions system remains unfeasible in the near term, and the recent geopolitical tensions remark a still strong reliance of the global economy on fossil fuels. In this paper, we develop a measure of media attention to environmental risk and dynamically assess its impact on the financial performance of energy stocks. Specifically, we build a Green Transition Attention Index (GTAI) by scraping headlines from The Wall Street Journal, a key resource for global investors, and use it to model the company’s financial returns within an asset pricing framework, subsetting results by region and energy sub-sector. The findings reveal a time-dependent relationship, with varying impact in both sign and magnitude. This suggests the GTAI as a tool for investors to navigate uncertainty, protect portfolios, and seize opportunities during the energy market’s transition toward identifying the dominant energy source of the coming decades.