Climate Risk Disclosure and Institutional Investors

66 Pages Posted: 19 Aug 2019 Last revised: 30 Nov 2022

See all articles by Emirhan Ilhan

Emirhan Ilhan

National University of Singapore (NUS) - Sustainable & Green Finance Institute (SGFIN)

Philipp Krueger

University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute; European Corporate Governance Institute (ECGI); University of Geneva - Geneva School of Economics and Management

Zacharias Sautner

University of Zurich - Department of Finance; Swiss Finance Institute; European Corporate Governance Institute (ECGI)

Laura T. Starks

University of Texas at Austin - Department of Finance

Date Written: September 1, 2022

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).

Keywords: Climate risk disclosure, non-financial reporting, institutional investors

JEL Classification: G11, G3, Q54

Suggested Citation

Ilhan, Emirhan and Krueger, Philipp and Sautner, Zacharias and Starks, Laura T., Climate Risk Disclosure and Institutional Investors (September 1, 2022). Swiss Finance Institute Research Paper No. 19-66, European Corporate Governance Institute – Finance Working Paper No. 661/2020, Available at SSRN: https://ssrn.com/abstract=3437178 or http://dx.doi.org/10.2139/ssrn.3437178

Emirhan Ilhan

National University of Singapore (NUS) - Sustainable & Green Finance Institute (SGFIN) ( email )

Singapore

HOME PAGE: http://emirhanilhan.github.io

Philipp Krueger

University of Geneva - Geneva Finance Research Institute (GFRI) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, Geneva 1211
Switzerland

Swiss Finance Institute ( email )

Switzerland

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

University of Geneva - Geneva School of Economics and Management ( email )

Uni Mail
Bd du Pont-d'Arve 40
Geneva, 1211
Switzerland

Zacharias Sautner (Contact Author)

University of Zurich - Department of Finance ( email )

Plattenstr 32
Zurich, 8032
Switzerland

Swiss Finance Institute ( email )

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Laura T. Starks

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-5899 (Phone)
512-471-5073 (Fax)

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