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Do firms walk the climate talk?

Author

Listed:
  • Dzielinski, Michal
  • Eugster, Florian
  • Sjöström, Emma
  • Wagner, Alexander F.

Abstract

Managers refer more to climate-related topics on earnings conference calls when climate matters are more material for a firm. However, there is also a large unexplained variation in climate talk. Employing a global sample of firms, we find that this extra climate talk is negatively related to the change in CO2 emissions in the years after the call. After the Paris Agreement, only remarks in answers continue to predict emission changes, suggesting that climate talk has become a staple in prepared managerial remarks. In the US, individualistic cultures, and cultures characterized by short-term horizons, climate talk does not predict emission reductions, and in these settings, stock prices also react negatively to climate talk. Overall, these results suggest that firms generally walk the climate talk, but the credibility of such talk varies among firms.

Suggested Citation

  • Dzielinski, Michal & Eugster, Florian & Sjöström, Emma & Wagner, Alexander F., 2024. "Do firms walk the climate talk?," CEPR Discussion Papers 19189, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19189
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    More about this item

    Keywords

    Climate change; Earnings conference calls; Sustainability; Greenwashing;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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