Reputation risk is among the possible climate transition risks companies face, especially in emission-intensive industries. Failing to meet stakeholders' expectations about the contribution to climate goals might influence investors' strategies and produce financial damages. We look at the climate-related social media talk in a sample of highly polluting companies. For these companies, reputation risk materialises if their climate talk is perceived as not coherent with their action-taking. We then assess the impact of climate talk on short-term stock market performance, as measured by abnormal returns, and find a positive association between climate-related social media talks and abnormal returns. The strength of this association lowers during peak days of social media attention on climate-related topics.

Guastella, G., Mazzarano, M., Pareglio, S., Xepapadeas, A., Climate reputation risk and abnormal returns in the stock markets: A focus on large emitters, <<INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS>>, 2022; 84 (N/A): N/A-N/A. [doi:10.1016/j.irfa.2022.102365] [https://hdl.handle.net/10807/218704]

Climate reputation risk and abnormal returns in the stock markets: A focus on large emitters

Guastella, G.;Mazzarano, M.
;
Pareglio, S.;
2022

Abstract

Reputation risk is among the possible climate transition risks companies face, especially in emission-intensive industries. Failing to meet stakeholders' expectations about the contribution to climate goals might influence investors' strategies and produce financial damages. We look at the climate-related social media talk in a sample of highly polluting companies. For these companies, reputation risk materialises if their climate talk is perceived as not coherent with their action-taking. We then assess the impact of climate talk on short-term stock market performance, as measured by abnormal returns, and find a positive association between climate-related social media talks and abnormal returns. The strength of this association lowers during peak days of social media attention on climate-related topics.
Inglese
Guastella, G., Mazzarano, M., Pareglio, S., Xepapadeas, A., Climate reputation risk and abnormal returns in the stock markets: A focus on large emitters, <<INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS>>, 2022; 84 (N/A): N/A-N/A. [doi:10.1016/j.irfa.2022.102365] [https://hdl.handle.net/10807/218704]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/218704
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