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Climate Risk Disclosure and Institutional Investors

Author

Listed:
  • Emirhan Ilhan
  • Philipp Krueger
  • Zacharias Sautner
  • Laura T Starks

Abstract

Through a survey and analyses of observational data, we provide systematic evidence that institutional investors value and demand climate risk disclosures. The survey reveals the investors have a strong demand for climate risk disclosures, and many actively engage their portfolio firms for improvements. Empirical analyses of holdings data corroborate this evidence by showing a significantly positive association between climate-conscious institutional ownership and better firm-level climate risk disclosure. We establish further evidence of institutional investors’ influence on firms’ climate risk disclosures by examining a shock to the climate risk disclosure demand of French institutional investors (French Article 173).Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Suggested Citation

  • Emirhan Ilhan & Philipp Krueger & Zacharias Sautner & Laura T Starks, 2023. "Climate Risk Disclosure and Institutional Investors," The Review of Financial Studies, Society for Financial Studies, vol. 36(7), pages 2617-2650.
    • Handle: RePEc:oup:rfinst:v:36:y:2023:i:7:p:2617-2650.
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    References listed on IDEAS

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    1. Ströbel, Johannes & Wurgler, Jeffrey, 2021. "What do you think about climate finance?," CEPR Discussion Papers 16622, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Alix Auzepy & Christina E. Bannier & Fabio Martin, 2023. "Are sustainability‐linked loans designed to effectively incentivize corporate sustainability? A framework for review," Financial Management, Financial Management Association International, vol. 52(4), pages 643-675, December.
    2. Martijn Boermans & Rients Galema, 2023. "Carbon home bias of European investors," Working Papers 786, DNB.
    3. Hao Dong & Tao Li, 2023. "Climate Economics and Finance: A Literature Review," Climate Economics and Finance, Anser Press, vol. 1(1), pages 29-45, November.

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    More about this item

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G3 - Financial Economics - - Corporate Finance and Governance
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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