Climate Risk Disclosure and Institutional Investors

AuthorP. Krüger, Z. Sautner, E. Ilhan, L. T. Starks
JournalThe Review of Financial Studies
Date25 juil 2023
CatégorieAcademic Publications
Volume36(7)
Page numbers2617–2650

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).