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Climate change-related risks and bank stock returns

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  • Boungou, Whelsy
  • Urom, Christian

Abstract

Using daily stock index data for global and G20 banks over the period from January 2011 to November 2019, we find that climate change risks have a negative impact on banks’ stock performance.

Suggested Citation

  • Boungou, Whelsy & Urom, Christian, 2023. "Climate change-related risks and bank stock returns," Economics Letters, Elsevier, vol. 224(C).
    • Handle: RePEc:eee:ecolet:v:224:y:2023:i:c:s0165176523000368
    DOI: 10.1016/j.econlet.2023.111011
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Chen, Jiusheng & Wang, Xianning, 2025. "Climate policy uncertainty and the Chinese sectoral stock market: A multilayer network analysis," Economic Systems, Elsevier, vol. 49(1).
    2. Liu, Yike & Xu, Zihan & Xing, Xiaoyun & Zhu, Yuxuan, 2024. "Can Chinese investors manage climate risk domestically and globally?," International Review of Economics & Finance, Elsevier, vol. 96(PB).
    3. Guillaume Pijourlet, 2024. "Climate policy uncertainty and US industry stock returns: A quantile regression approach," Economics Bulletin, AccessEcon, vol. 44(1), pages 182-189.
    4. Albanese, Marina & Caporale, Guglielmo Maria & Colella, Ida & Spagnolo, Nicola, 2025. "The effects of physical and transition climate risk on stock markets: Some multi-Country evidence," International Economics, Elsevier, vol. 181(C).
    5. Waheed Ullah Shah & Ibtissem Missaoui & Ijaz Younis & Xiyu Liu, 2025. "Climate risk co-movements effect on South Asia’s emerging stock market for financial inclusion," Future Business Journal, Springer, vol. 11(1), pages 1-20, December.
    6. Chen, Deyang & Zeng, Zheyu & Chen, Yunyue, 2024. "Heterogeneous impacts of multiple climate policies on the chinese stock market," Finance Research Letters, Elsevier, vol. 60(C).
    7. Fiordelisi, Franco & Ricci, Ornella & Santilli, Gianluca, 2025. "Spotlight on physical risk: Assessing the banks' stock reaction to the ECB climate stress test," International Review of Financial Analysis, Elsevier, vol. 98(C).
    8. Ma, Yong & Zhou, Mingtao & Li, Shuaibing, 2024. "Weathering market swings: Does climate risk matter for agricultural commodity price predictability?," Journal of Commodity Markets, Elsevier, vol. 36(C).
    9. Petre Caraiani & Onur Polat & Rangan Gupta & Elie Bouri, 2025. "Climate Risks and Predictability of Financial Risks in the US Banking Sector," Working Papers 202507, University of Pretoria, Department of Economics.
    10. Tiwari, Aviral Kumar & Trinh, Hai Hong & Vo, Diem Thi Hong & Sharma, Gagan Deep, 2025. "How do economies decarbonize growth under finance-energy inequality? Global evidence," Energy Economics, Elsevier, vol. 142(C).
    11. Maru, Lucy, 2026. "The mediating role of ESG on the interaction between green banking and financial performance of commercial banks in Kenya," KBA Centre for Research on Financial Markets and Policy Working Paper Series 103, Kenya Bankers Association (KBA).
    12. Zanin, Luca, 2023. "A flexible estimation of sectoral portfolio exposure to climate transition risks in the European stock market," Journal of Behavioral and Experimental Finance, Elsevier, vol. 39(C).
    13. Enwo-Irem, Imaculata Nnenna & Urom, Christian, 2024. "Climate change concerns and macroeconomic condition predictability," Finance Research Letters, Elsevier, vol. 60(C).
    14. Whelsy Boungou & Melchisedek Ngambou Djatche & Nicholas Biekpe, 2025. "Chinese Stock Market Performance and Natural Disasters," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 24(3), pages 281-305, September.
    15. Boungou, Whelsy & Urom, Christian, 2025. "Geopolitical tensions and banks’ stock market performance," Economics Letters, Elsevier, vol. 247(C).

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    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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