Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • April 22, 2021
  • Article
  • Harvard Business Review Digital Articles

Shareholders Are Pressing for Climate Risk Disclosures. That's Good for Everyone

By: Caroline Flammer, Michael W. Toffel and Kala Viswanathan
  • Format:Electronic
ShareBar

Abstract

Does shareholder activism induce firms to voluntarily disclose climate change risks? And how do markets respond to these disclosures? New research finds that the extent of climate-risk disclosure increases by approximately 4.6% for each environment-related proposal that is submitted, and that the effect rises to 6.8% when environmental shareholder activism is initiated by institutional shareholders with a long-term holding horizon. It also found that the stock market responds favorably to such disclosures, with a disclosing firm’s stock price increasing by 1.21% on average in the days following a disclosure. This suggests that investors value higher transparency with respect to climate change risks and that disclosure tends to benefit disclosing companies.

Keywords

Reporting; Transparency; Activism; Shareholder Activism; Shareholder Engagement; Climate Change; Corporate Disclosure; Investment Activism; Business and Shareholder Relations

Citation

Flammer, Caroline, Michael W. Toffel, and Kala Viswanathan. "Shareholders Are Pressing for Climate Risk Disclosures. That's Good for Everyone." Harvard Business Review Digital Articles (April 22, 2021).
  • Find it at Harvard
  • Register to Read

About The Author

Michael W. Toffel

Technology and Operations Management
→More Publications

More from the Authors

    • January 2023
    • Faculty Research

    Global Sourcing at Nike

    By: Nien-hê Hsieh and Michael W. Toffel
    • December 2022
    • Faculty Research

    Driving Decarbonization at BMW - Spreadsheet Supplement

    By: Shirley Lu, George Serafeim and Michael W. Toffel
    • December 2022
    • Faculty Research

    Driving Decarbonization at BMW - Video Supplement

    By: Shirley Lu, George Serafeim and Michael W. Toffel
More from the Authors
  • Global Sourcing at Nike By: Nien-hê Hsieh and Michael W. Toffel
  • Driving Decarbonization at BMW - Spreadsheet Supplement By: Shirley Lu, George Serafeim and Michael W. Toffel
  • Driving Decarbonization at BMW - Video Supplement By: Shirley Lu, George Serafeim and Michael W. Toffel
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College