- 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.