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XF-RBMIMTR-K
Research / Academic Paper ACTIVE

Hedging climate change news

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Abstract

Abstract We propose and implement a procedure to dynamically hedge climate change risk. We extract innovations from climate news series that we construct through textual analysis of newspapers. We then use a mimicking portfolio approach to build climate change hedge portfolios. We discipline the exercise by using third-party ESG scores of firms to model their climate risk exposures. We show that this approach yields parsimonious and industry-balanced portfolios that perform well in hedging innovations in climate news both in sample and out of sample. We discuss multiple directions for future research on financial approaches to managing climate risk.

Source: resolved

Document Metadata

Issuer
National Bureau of Economic Research
Document Type
Research / Academic Paper
Publication Year
2020
Retrieved
5 May 2026
Source
Contact XFID for Access
Record ID
XFRBMIMTRK
Validation
Inferred by XFID

Topics

Asset PricingClimate Risk

Cited by (1)

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Academic / report citation
National Bureau of Economic Research (2020). Hedging climate change news. XFID: XF-RBMIMTR-K. Retrieved from https://xframework.id/XFRBMIMTRK
Identifier only
XF-RBMIMTR-K