Real effects of media climate change concerns

This study addresses the calls in prior research for evidence on the real effects of preferences for climate change risk by investigating whether companies with opposing externalities—brown versus green companies—adjust their climate-related activities in response to exogenous shocks in public concern for climate change, as reflected in news articles. We find that although brown companies reduce their direct and indirect greenhouse gas (GHG) emissions, they do not invest heavily in climate projects, suggesting a preference for cost-effective measures. Further textual analysis reveals that brown companies tend to use less complex stand-alone reports when communicating with external stakeholders. However, although green companies have greater access to low-cost external financial resources during unexpected changes in public concern, we find no evidence that they use these resources to reduce direct GHG emissions. Instead, our findings indicate only limited participation in indirect GHG reduction initiatives, with no significant allocation of these financial resources to dedicated climate projects. This reluctance of green companies to undertake direct GHG reductions is consistent with ongoing anecdotal discussions regarding the challenges of achieving net-zero targets, prompting a call for further research into potential barriers to greener transitions.