Propagation of climate disasters through ownership networks

Climate disasters propagate through common ownership networks. Institutional investors in firms hit by climate-related disasters are more likely to vote in favor of climate proposals at their other portfolio firms. This effect is short-lived, larger in periods of high attention to climate change, and concentrated in carbon-intensive firms. Aggregating investor-level shocks to the firm level, we find that firms with impacted investors exhibit an immediate reduction in climate change sentiment on conference calls. Over time, they lower emissions and energy use, and enhance climate focus in governance. These findings highlight the ripple effects of climate disasters through investment networks, influencing corporate behavior towards environmental responsibility.