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  • 2019
  • Working Paper
  • HBS Working Paper Series

Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks

By: Caroline Flammer, Michael W. Toffel and Kala Viswanathan
  • Format:Print
  • | Language:English
  • | Pages:44
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Abstract

This paper examines whether—in the absence of mandated disclosure requirements—shareholder activism can elicit greater disclosure of firms’ exposure to climate change risks. We find that environmental shareholder activism increases the voluntary disclosure of climate change risks, especially if initiated by investors who are more powerful (institutional investors) or whose request has more legitimacy (long-term institutional investors). We also find that companies that voluntarily disclose climate change risks following environmental shareholder activism achieve a higher valuation, suggesting that investors value transparency with respect to climate change risks.

Keywords

Corporate Accountability; Corporate Disclosure; Corporate Social Responsibility And Impact; Business And Shareholder Relations; Risk And Uncertainty; Natural Environment; Environmental Sustainability; Climate Change; Financial Services Industry; United States

Citation

Flammer, Caroline, Michael W. Toffel, and Kala Viswanathan. "Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks." Harvard Business School Working Paper, No. 20-049, October 2019.
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About The Author

Michael W. Toffel

Technology and Operations Management
→More Publications

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More from the Authors
  • Manage the Suppliers That Could Harm Your Brand: Know When to Avoid, Engage, or Drop Them By: Jodi L Short and Michael W. Toffel
  • Assessing Prediction Accuracy of Machine Learning Models By: Michael Toffel and Natalie Epstein
  • T-tests: Theory and Practice By: Michael Parzen, Natalie Epstein, Chiara Farronato and Michael Toffel
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