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Can Climate Risk Disclosure Attract Analyst Coverage? A Study Based on the Dual Perspective of Information Supply and Demand

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  • Mengxue Li

    (School of Economics and Management, China University of Mining and Technology, Xuzhou 221116, China
    School of Accounting, Shandong Technology and Business University, Yantai 264005, China)

  • Sheng Yao

    (School of Management, Shanghai University, Shanghai 200444, China)

Abstract

In the context of the intensifying global climate change and its associated risks, the interaction between corporate climate risk disclosure and analyst forecasting behavior has become a pivotal scholarly focus in sustainability research. This study uses a sample of 20,978 firm-year observations from non-financial Chinese A-share listed companies over the period 2007–2021 to examine the impact of corporate climate risk disclosure on analyst coverage, applying ordinary least squares (OLS) regression. The results reveal a positive relationship between corporate climate risk disclosure and analyst coverage. This positive effect is more prominent in firms with lower annual report readability, a higher proportion of independent institutional investors, and in contexts involving team analysts or analysts from large brokerage firms. Mechanism analysis reveals two pathways for increased analyst coverage: increasing institutional investors’ demand for information and reducing analysts’ reliance on on-site research to uncover private information. Further research reveals that severe and chronic risk disclosures attract more analyst coverage than transition risk disclosures. Additionally, climate risk disclosure can significantly reduce analyst forecast dispersion and long-term forecast bias. Overall, this study holds important implications for improving corporate climate risk disclosure practices and enhancing analysts’ role as information intermediaries.

Suggested Citation

  • Mengxue Li & Sheng Yao, 2025. "Can Climate Risk Disclosure Attract Analyst Coverage? A Study Based on the Dual Perspective of Information Supply and Demand," Sustainability, MDPI, vol. 17(9), pages 1-25, April.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:9:p:3960-:d:1644477
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    References listed on IDEAS

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