Climate Risk Disclosure and Institutional Investors
Swiss Finance Institute Research Paper No. 19-66
European Corporate Governance Institute – Finance Working Paper No. 661/2020
66 Pages Posted: 19 Aug 2019 Last revised: 30 Nov 2022
Date Written: September 1, 2022
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).
Keywords: Climate risk disclosure, non-financial reporting, institutional investors
JEL Classification: G11, G3, Q54
Suggested Citation: Suggested Citation