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Warning words in a warming world: central bank communication and climate change

Author

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  • Emanuele Campiglio

    (University of Bologna, Department of Economics, Bologna, Italy, CMCC - Euro-Mediterranean Center on Climate Change, LSE - London School of Economics and Political Science)

  • Jérôme Deyris

    (CEE - Centre d'études européennes et de politique comparée (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Davide Romelli

    (Trinity College Dublin)

  • Ginevra Scalisi

    (SSSUP - Scuola Universitaria Superiore Sant'Anna = Sant'Anna School of Advanced Studies [Pisa])

Abstract

We study climate-related central bank communication using a novel dataset containing 35,487 speeches delivered by 131 central banks from 1986 to 2023. We employ natural language processing techniques to identify and trace the evolution of key climate-related narratives centred around (i) green finance, and (ii) climate-related financial risks. We find that central bank public communication strategies are primarily driven by underlying institutional factors, rather than exposure to climate-related risks. We then study the impact of climate-related communication on financial market dynamics through both a portfolio and a firm-level analysis. We find that equity returns of ‘green' firms outperform those of ‘dirty' firms when central banks engage more frequently and intensely with climate-related topics.

Suggested Citation

  • Emanuele Campiglio & Jérôme Deyris & Davide Romelli & Ginevra Scalisi, 2025. "Warning words in a warming world: central bank communication and climate change," SciencePo Working papers Main hal-04978072, HAL.
    • Handle: RePEc:hal:spmain:hal-04978072
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-04978072v1
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    1. Georgarakos, Dimitris & Kenny, Geoff & Meyer, Justus & van Rooij, Maarten, 2025. "How do rising temperatures affect inflation expectations?," Working Paper Series 3132, European Central Bank.

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    Keywords

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    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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