Show tell: An analysis of corporate climate messaging and its financial impacts

Abstract

c o n f i d e n t i a l show & tell an analysis of corporate climate messaging and its financial impacts a p r i l 2 0 2 3 joseph e. aldy harvard kennedy school patrick bolton columbia university and imperial college zachery m. halem lazard marcin t. kacperczyk imperial college peter r. orszag lazard show & tell: an analysis of corporate climate messaging and its financial impacts by: joseph e. aldy, patrick bolton, zachery m. halem, marcin t. kacperczyk, peter r. orszag of forms physical climate-induced abstract and as transition risks to corporations are becoming more and more material, investors are increasingly scrutinizing a patchwork of voluntary climaterelated communications–namely public disclosures, emission reduction commitments, and soft information from earnings calls and other public for announcements. we observe, firms, a rise in the large-cap u.s. usage climate of all communication from 2010-2020. we also find evidence that a majority of firms are not decarbonizing on a sufficient trajectory to meet committed emission reduction targets. in regard to financial effects, we show that from increased disclosure can offset a significant price-to-earnings portion discount carbon associated with emissions, especially for firms in the energy and industrial sectors. a similar effect is observed for positive climaterelated sentiment during the q&a , but not the management update section of earnings calls. commitments are shown statistically insignificant impact on …

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