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Climate Talk in Corporate Earnings Calls

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Abstract

Climate change is a major concern for many companies, but it has not historically featured much in earnings conference calls. We find a marked increase in climate talk on these calls in recent years. We also find that climate talk is negatively related to the change in CO2 emissions (especially Scope 2) in the year after the call, particularly in firms with high overall environmental and governance ratings. Conversely, investors react particularly negatively to climate talk when it comes from a firm with low levels of ESG performance or following poor earnings performance. Finally, a firm employs more climate talk when it is more material, when there is greater shareholder pressure or when it is better prepared for climate-related disclosure. Overall, these results suggest that investors and other stakeholders interested in corporate climate action should be paying attention to earnings conference calls as a source of useful information about companies’ broader stance on climate-related issues.

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  • Dzieliński, Michał & Eugster, Florian & Sjöström, Emma & Wagner, Alexander F., 2022. "Climate Talk in Corporate Earnings Calls," HoSS Working Paper Series 2022-6, Stockholm School of Economics, House of Sustainable Society (HoSS).
    • Handle: RePEc:hhs:hamisu:2022_006
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    Cited by:

    1. Jin, Zuben, 2024. "Business aspects in focus, investor underreaction and return predictability," Journal of Corporate Finance, Elsevier, vol. 84(C).
    2. Jaemin Kim & Joy Jiang & Michael Greiner, 2025. "Executive Presentations and Environmental Action in Polluting Industries: Moderating Effects of Narrative and Numeric Concreteness on Aspirational Talk," Journal of Business Ethics, Springer, vol. 199(2), pages 255-283, June.
    3. Rahman, Sohanur & Sinnewe, Elisabeth & Chapple, Larelle, 2024. "Environment-specific political risk discourse and expected crash risk: The role of political activism," International Review of Financial Analysis, Elsevier, vol. 95(PB).

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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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