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Climate policy uncertainty and corporate environmental risk-taking

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  • Kim, Yongwon
  • Park, Young Kyu
  • Ryu, Doojin

Abstract

We examine the impact of climate policy uncertainty (CPU) on corporate environmental risk-taking and stock performance. Environmental incidents, especially those related to climate change, increase following high CPU periods. Furthermore, CPU lowers future stock returns, with a stronger effect following environmental incidents. We underscore the role of CPU in corporate risk-taking on environmental issues, which results in negative stock returns.

Suggested Citation

  • Kim, Yongwon & Park, Young Kyu & Ryu, Doojin, 2025. "Climate policy uncertainty and corporate environmental risk-taking," Finance Research Letters, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325008141
    DOI: 10.1016/j.frl.2025.107555
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    References listed on IDEAS

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    Cited by:

    1. Wu, Xiaoying & Kang, Hyoung-Goo & Ryu, Doojin, 2025. "Green finance reform and reshaping firm-banking relationships: Evidence from China," Global Finance Journal, Elsevier, vol. 68(C).
    2. Chen, Guorong & Xing, Xiaoyun & Deng, Jing, 2025. "Climate–biodiversity–finance nexus: Comparative evidence from the U.S. and China," Finance Research Letters, Elsevier, vol. 86(PA).
    3. Yang, Kun & Huang, Xinyue & Yu, Wenhua & Wei, Yu, 2025. "The impacts of climate policy uncertainty on stock market extreme risk spillovers," Finance Research Letters, Elsevier, vol. 85(PB).
    4. Sun, Haibo & Xu, Xiaoman & Liu, Zhonglu, 2025. "Climate policy uncertainty and executives' opportunistic stock selling," Finance Research Letters, Elsevier, vol. 83(C).
    5. You, Wonhee & Kang, Hankil & Ryu, Doojin, 2025. "How do climate and market uncertainties affect ESG performance?," Finance Research Letters, Elsevier, vol. 86(PG).

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