Review of Financial Studies Vol. 36 No. 7 2023

Climate Risk Disclosure and Institutional Investors

Emirhan Ilhan¹; Philipp Krueger²; Zacharias Sautner³; Laura T. Starks⁴

¹ National University of Singapore (NUS) Business School , Singapore · ² University of Geneva and the Swiss Finance Institute , Switzerland · ³ Frankfurt School of Finance & Management , Germany · ⁴ McCombs School of Business, University of Texas at Austin , USA

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).

DOI

10.1093/rfs/hhad002

Volume

36

Issue

7

Pages

2617-2650

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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