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Do climate risk disclosures matter to financial analysts?

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  • Walid Ben‐Amar
  • Diana Castro Herrera
  • Isabelle Martinez

Abstract

This paper examines whether and when corporate disclosures about a firm's exposure to climate risks matter to financial analysts. More specifically, we investigate the association between climate risk disclosure (CRD) and two properties of financial analysts’ earnings forecasts (accuracy and dispersion). We predict that climate risk financial materiality at the industry level moderates this association. Using a sample of 2184 US nonfinancial firm‐year observations over the period 2010–2016, we show that CRD is associated with higher forecast precision and lower dispersion only when climate risks are perceived by investors as being financially material at the industry level. We also find that while corporate disclosures about transition risks are not associated with financial analyst forecast properties, 10‐K disclosures about climate‐related material physical risks reduce analyst forecast error and dispersion.

Suggested Citation

  • Walid Ben‐Amar & Diana Castro Herrera & Isabelle Martinez, 2024. "Do climate risk disclosures matter to financial analysts?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 51(7-8), pages 2153-2180, July.
    • Handle: RePEc:bla:jbfnac:v:51:y:2024:i:7-8:p:2153-2180
    DOI: 10.1111/jbfa.12778
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    References listed on IDEAS

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    Cited by:

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    3. Xiaoyu Liu & Yazeed Alkhrijah & Monomita Nandy & Suman Lodh, 2026. "When TCFD Meets TNFD: Can It Revolutionize Corporate Sustainable Risk Management?," Business Strategy and the Environment, Wiley Blackwell, vol. 35(4), pages 5544-5559, May.
    4. Raimo, Nicola & L'Abate, Vitiana & Vitolla, Filippo & Salvi, Antonio & Petruzzella, Felice, 2026. "Closing the loop on forecasts: Circular economy disclosure via social media platforms and analyst forecast quality," Technology in Society, Elsevier, vol. 84(C).
    5. Michela Magliacani & Gennaro Maione & Valentina Toscano & Daniela Sica, 2025. "Beyond technique: The role of the multidimensional nature of energy accounting in shaping a better world," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 1460-1474, January.
    6. Sheng, Xiaohan & Yang, Lin, 2025. "From headlines to earnings: Do biodiversity disclosures tighten analyst forecasts?," Finance Research Letters, Elsevier, vol. 85(PD).
    7. Hu Wang & Hong Shen & Yuanqiang Lian & Shangyan Bao, 2026. "Nonfundamental‐Driven Price Shocks and Corporate Climate Risk Disclosure," Australian Accounting Review, CPA Australia, vol. 36(1), pages 26-51, March.

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