Institutional Investors’ Views and Preferences on Climate Risk Disclosure

Institutional Investors’ Views and Preferences on Climate Risk Disclosure

Emirhan Ilhan, Philipp Krueger, Zacharias Sautner, Laura Starks

Series number :

Serial Number: 
661/2020

Date posted :

February 20 2020

Last revised :

March 27 2020
SSRN Share

Keywords

  • climate finance • 
  • climate risk disclosure • 
  • Transparency • 
  • institutional investors

Surveying institutional investors on portfolio firms’ climate risk disclosures, we find that many think climate risk reporting to be as important as traditional financial reporting and that it should be mandatory and more standardized. We find systematic variation in their opinions depending on investor characteristics and their beliefs about climate change.

For example, the belief that current 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.

Authors

Real name:
Emirhan Ilhan
Real name:
Philipp Krueger