Institutional Investors’ Views and Preferences on Climate Risk Disclosure

50 Pages Posted: 19 Aug 2019 Last revised: 1 Oct 2019

See all articles by Emirhan Ilhan

Emirhan Ilhan

Frankfurt School of Finance & Management

Philipp Krueger

University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute

Zacharias Sautner

Frankfurt School of Finance & Management gemeinnützige GmbH; European Corporate Governance Institute (ECGI)

Laura T. Starks

University of Texas at Austin - Department of Finance

Date Written: October 01, 2019

Abstract

We survey institutional investors on firms’ climate risk disclosures. Many investors believe climate risk reporting to be as important as traditional financial reporting and that it should be mandatory and more standardized. However, they also view current quantitative and qualitative disclosure on climate risks as being insufficient and imprecise. The belief that current climate-related disclosure is deficient derives more from investors that believe climate risks are underpriced in equity markets. We complement the survey analysis with archival data showing that greater institutional ownership is associated with a higher propensity of firms to voluntarily disclose their carbon emissions.

Keywords: climate finance, climate risk disclosure, transparency, institutional investors

JEL Classification: G11, G3, Q54

Suggested Citation

Ilhan, Emirhan and Krueger, Philipp and Sautner, Zacharias and Starks, Laura T., Institutional Investors’ Views and Preferences on Climate Risk Disclosure (October 01, 2019). Available at SSRN: https://ssrn.com/abstract=3437178 or http://dx.doi.org/10.2139/ssrn.3437178

Emirhan Ilhan

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

HOME PAGE: http://sites.google.com/view/emirhanilhan/

Philipp Krueger

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

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

Swiss Finance Institute ( email )

Switzerland

Zacharias Sautner (Contact Author)

Frankfurt School of Finance & Management gemeinnützige GmbH ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 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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