Publications
Publications
- 2021
- HBS Working Paper Series
Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks
By: Caroline Flammer, Michael W. Toffel and Kala Viswanathan
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 institutional investors, and even more so if initiated by long-term institutional investors. We also find that companies that voluntarily disclose climate change risks following environmental shareholder activism achieve a higher valuation post disclosure, suggesting that investors value transparency with respect to firms’ exposure to climate change risks.
Keywords
Shareholder Activism; Climate Risk; Corporate Accountability; Climate Change; Corporate Disclosure; Corporate Governance; Corporate Social Responsibility and Impact; Business and Shareholder Relations; Risk and Uncertainty; Natural Environment; Environmental Sustainability; 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. (Revised March 2021.)