We show that political polarization among directors negatively affects corporate board effectiveness by reducing forced CEO turnover-performance sensitivity. Our results are more pronounced in presidential election years and for firms with more monitoring and advising needs. Polarization also increases the departure likelihood for directors who are ideologically distant from the rest of the board, making boards more politically homogeneous over time. Finally, we show that polarization in the boardroom lowers firms' investment- Q sensitivity and Environmental, Social and Governance (ESG) performance. Our findings highlight the real economic cost of political polarization

We study the effects of employee welfare policies (EWPs) on labor investments of U.S. firms. We show that EWPs are associated with a significantly weaker pass-through of industry sales shocks to firm employment growth. EWPs’ insulation effect is stronger in states with less generous unemployment insurance, in states with lower wage growth, and in firms relying more on qualified labor. We corroborate our results exploring policy-induced variation in workforce policies from the adoption of Paid Sick Leave laws, and industry-wide shocks to labor ESG incidents. Our findings suggest that EWPs may insure workers against employment fluctuations

Sustainable finance—the integration of environmental, social, and governance (“ESG”) issues into financial decisions—is an increasingly important topic. Within companies, sustainability is no longer an ancillary issue confined to corporate social responsibility departments, but a CEO-level issue fundamental to the core business. Within the investment industry, sustainability used to be the exclusive domain of “socially responsible investors” who had social as well as financial objectives, but is now mainstream and includes investors with purely financial goals. This article introduces the RF Special Issue on Sustainability. It highlights three reasons for the rapid rise in sustainable finance—its financial relevance, its contribution to nonfinancial objectives, and investor tastes. It then summarizes the eight articles in the Special Issue, in particular drawing out their contributions to the literature. Finally, we offer ideas for future research

This study analyzes the evolution of climate-risk discourse in banking using 4,887 news articles (2008–2024) collected from ProQuest. We apply Natural Language Processing and add two novel layers: (i) an event-alignment analysis that links coverage dynamics to dated policy and supervisory milestones, and (ii) a discourse-network analysis connecting banks and regulators. We document a marked post-2020 shift, with ESG emerging as the dominant framing (7,860 mentions) alongside persistent geographic asymmetries (U.S.-led coverage) and uneven sectoral engagement (Risk Management highest salience; Fintech lowest). Sentiment skews positive (≈4,000 positive vs. ≈1,500 negative), and topic modeling identifies eight stable thematic clusters spanning operations, ratings, ESG assessment, disclosures, and market instruments. Event alignment shows media attention is typically anticipatory (median peak two months before an anchor), with COP26 producing a sustained level shift (+100% within a ±6-month window) and the Bank of England’s CBES results generating the largest single spike (210 articles), whereas some 2022 rule-making announcements (e.g., SEC climate-disclosure proposal) exhibit sharper but less durable attention. The discourse network centers on two regulatory hubs (the Federal Reserve and the ECB) with key banks (e.g., Citigroup, JPMorgan, UBS) bridging into supervisory narratives. Collectively, the findings show climate risk becoming embedded in core banking practice while revealing structural, regional, and functional asymmetries that matter for policy design and implementation. • Provides the first longitudinal NLP-based analysis of climate risk discourse in the banking sector • Reveals how climate risk integration in banking has evolved across regulatory, operational, and market dimensions • Identifies distinct thematic domains shaping climate risk narratives in banking over time • Shows that climate risk discourse is predominantly anticipatory around major policy and supervisory milestones • Maps the institutional structure of climate risk governance by linking banks and regulators within a discourse network

Corporate lobbying positively influences firm innovation outcomes. Firms that engage more in lobbying have more patents, more patent citations, and greater patent value. We establish this causality using instrumental variables estimation. Corporate lobbying plays a role of persuasion and fosters firm innovation by transmitting valuable information to politicians, which enhances firms' external political environment. The impact of lobbying on innovation is more pronounced for firms with comparative advantages in the product market, financial health, ESG performance, and institutional support. These results contribute to a deeper understanding of the role of firms' information value in the political process and provide new insights into how lobbying buffs firm development

We examine voluntary disclosure decisions when firms are uncertain about audience preferences and are risk averse. In contrast to classic “unraveling” results, some firms remain silent in equilibrium. Silence is safer than disclosure; silence reduces the sensitivity of a firm’s payoff to audience preferences. Increases in firm (audience) risk-aversion reduce (increase) disclosure. Our model explains why some firms do not disclose earnings breakdowns, executive compensation, or Environmental, Social, and Governance (ESG) performance when they face diverse audiences, and why they disclose less under regulatory rules mandating that disclosure be entirely public

We examine whether free-speech protections influence corporate environmental performance. Using the staggered enactment of U.S. anti-SLAPP statutes in a stacked difference-in-differences design from 1990 to 2019, we find that these laws significantly reduce firms’ toxic emissions without curbing economic activity. Anti-SLAPP enactments also promote environmental investment through green innovation, abatement spending, and waste reduction management, and strengthen governance via improved sustainability oversight, ESG-linked executive pay, employee training, and supply chain management. The effects are stronger when stakeholder monitoring is stronger and when managerial incentives embed sustainability goals. Overall, free-speech protections generate powerful environmental benefits