Event Details

Accounting and Finance, Accounting seminar to be presented by Hami Amiraslani, INSEAD Asia Campus. Paper title: Climate Disclosure Regulation and Investor Wealth.

Hami Amiraslani | INSEAD

Abstract

We study the relation between climate disclosure regulation and investor wealth by examining market responses to events associated with the SEC’s proposed rule to enhance and standardize climate-related disclosures. Our findings suggest a negative investor response on average across all events and a more pronounced negative response to regulatory events and those that are directly related to the proposed rule. The negative investor response is stronger for firms with higher ex ante proprietary costs and greater exposure to litigation risk. Conversely, firms with sustainability-oriented governance structures and compensation schemes and those that voluntarily provide sustainability disclosures experience a less negative investor response. These results are not subsumed by firms’ exposure to climate risk. Our findings are consistent with theoretical predictions on the costs and benefits of disclosure regulation, reveal heterogeneity in the anticipated effects of climate transparency, and inform the debate around the SEC’s proposed climate disclosure rule.

Keywords: climate change, disclosure, emissions, ESG, governance, regulation, SEC, sustainability.

JEL classification: G14, G18, G28, G34, G38, M12, M14, M41, M48, Q51, Q54, Q56

Data availability: All data are available from sources indicated in the text.