We are pleased to announce that on December 26, 2022, the Center for Positive/Empirical Analysis of Political Economy will hold a special seminar by Professor Vikas Mehrotra (University of Alberta) entitled “The Demand and Voluntary Supply of Climate Disclosure”. As a visiting professor invited to Waseda University by the Center, Professor Mehrotra is currently in charge of the regular course “Corporate Governance and M&A” in the winter quarter.
- Speaker: Professor Vikas Mehrotra (University of Alberta)
- Date and Time: Monday, December 26, 2022, 13:00-14:30 JST
- Venue: Waseda University, Waseda Campus, Building 11, Room 818
(Both in-person and on Zoom) - Language: English
- Open to members of Waseda University and the general public. Free admission.
- Registration required. Please register from here.
Abstract
This paper studies whether and how investor demand for climate risk information (CRI) influences firms’ voluntary climate disclosures. Investors express their demand for CRI publicly through shareholder proposals or privately through engagements with investee firms, or both. In a sample of S&P 500 companies for 2010-2020, we find that firms’ voluntary climate disclosure decisions are positively associated with engagements by the so-called Big 3 institutional investors, viz. Blackrock, Vanguard and State Street. We observe little direct evidence on the efficacy of shareholder resolutions in prompting climate risk disclosure; nevertheless, we find some evidence that non-Big3 investors are more likely to successfully employ them to prod firms to disclose climate risk. We find that Big 3 is more likely to vote against directors’ election or vote for shareholder resolutions (against the management) following firms’ non-disclosure of CRI. Our results are more consistent with an influence effect—Big 3 engagements lead to climate disclosures, but we find little evidence of a reverse causality wherein large institutional investors self-select into the disclosing group of firms. Finally, our results are stronger in the post-Paris period; we see some evidence of the effect of a change in investor preferences around the time of the Paris Climate Accord.
