Climate Risk Disclosure and Institutional Investors

2023/01/07 by Emirhan Ilhan, Philipp Krueger, Zacharias Sautner +1 · 8 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Auditing, Earnings Management, Governance #Corporate Social Responsibility Reporting #Sustainable Finance and Green Bonds

paper · pdf · doi:10.1093/rfs/hhad002

openalex publication_date 2023/01/07 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01

Abstract

Abstract Through a survey and analyses of observational data, we provide systematic evidence that institutional investors value and demand climate risk disclosures. The survey reveals the investors have a strong demand for climate risk disclosures, and many actively engage their portfolio firms for improvements. Empirical analyses of holdings data corroborate this evidence by showing a significantly positive association between climate-conscious institutional ownership and better firm-level climate risk disclosure. We establish further evidence of institutional investors’ influence on firms’ climate risk disclosures by examining a shock to the climate risk disclosure demand of French institutional investors (French Article 173). Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Citations

• How Much Should We Trust Differences-In-Differences Estimates?
• The New Institutional Economics: Taking Stock, Looking Ahead
• The Economics of Disclosure and Financial Reporting Regulation: Evidence and Suggestions for Future Research
• Foreign Institutional Investors and Corporate Voluntary Disclosure Around the World
• Carbon Tail Risk
• Text-Based Network Industries and Endogenous Product Differentiation
• Firm-Value Effects of Carbon Emissions and Carbon Disclosures
• Corporate green bonds
• Mandatory CSR and sustainability reporting: economic analysis and literature review
• Shareholder activism and firms' voluntary disclosure of climate change risks
• What do you think about climate finance?
• Greenhouse Gas Disclosure and Emissions Benchmarking

Cited by

• Independent companies in the tobacco supply chain: transparency and environmental social governance
• The Effects of Mandatory ESG Disclosure Around the World
• Do investors care about biodiversity?
• Carbon markets and firms’ perceived climate regulatory risk
• How cheap talk in climate disclosures relates to climate initiatives, corporate emissions, and reputation risk
• Facing the storm: Developing corporate adaptation and resilience action plans amid climate uncertainty
• Democratizing corporate governance: How retail investors’ ESG attention reduces ESG-washing
• Carbon home bias of European investors

Related

• The Importance of Climate Risks for Institutional Investors
• Shareholder activism and firms' voluntary disclosure of climate change risks
• Risky climate: the endogenous institutionalization of climate disclosure in corporate climate governance
• Automated Identification of Climate Risk Disclosures in Annual Corporate Reports
• Climate Finance