Effects of climate change and sustainability strategies on dividend policies

This paper examines how climate change and corporate sustainability strategies shape firm dividend policy decisions over the 2011–2022 period. The analysis covers 965 firms from 31 countries, grouped by their level of economic development to support comparative assessments. To understand dividend policies, the study considers factors such as country-level climate change, firm-level environmental, social, and governance (ESG) scores, ESG controversies, emission policy, and carbon risk. The analyses are conducted using panel logit and Tobit models and a two-stage framework in which the general stage includes all firms, while the carbon stage focuses on those with available carbon data. The findings show that climate change and sustainability strategies significantly influence dividend policies, and the effects vary depending on analytical stage, level of economic development, and whether the explanatory variables exhibit current or lagged effects. Incorporating lagged effects as robustness checks into the baselines further highlights how the policies of firms with carbon data differ across analytical stages and economic groupings.