Business climate risk management: international perspectives and strategic determinants

In recent years, climate change, environmental, social and governance factors, and their multidimensional impacts have become dominant topics of discussion. This study investigates the determinants of corporate climate risk management based on the theories of legitimacy, agency, and stakeholder. We utilize a diversified sample of multinational companies from Brazil, France, and the USA listed on stock exchanges, focusing on exposure, disclosure, and the implementation of climate projects. We conducted rigorous statistical analyses, including both classical and advanced robust models. Our methodology involved the use of robust covariance matrix estimation, robust Newey‒West estimation, and robust estimation by Driscoll and Kraay. Preliminary results reveal that a significant proportion of companies in these countries have not disclosed climate risks with business impacts, raising questions about awareness and recognition of these risks. Our analysis also highlights the predominant concern about regulatory risks, suggesting the need for companies to navigate a complex regulatory landscape. Furthermore, we identified the influence of factors such as size, industry profile, climate regulation, creditor power, auditor power, and profitability on climate risk management. Evidence suggests that companies of all sizes and backgrounds should recognize the importance of climate risk management and engage all stakeholders, including creditors and auditors, who play a crucial role in perceiving climate risk exposure. This involves the proactive assessment of risks associated with climate change and the implementation of strategies to mitigate them. This study provides valuable insights for business decisions aligned with sustainability and the transition to a low-carbon economy.