Propagation of climate disasters through ownership networks

Propagation of climate disasters through ownership networks

Matthew Gustafson, Ai He, Ugur Lel, Zhongling Qin

Series number :

Serial Number: 
941/2023

Date posted :

December 03 2023

Last revised :

December 03 2023
SSRN Share

Keywords

  • Common ownership • 
  • climate change • 
  • corporate ESG • 
  • CO2 emissions

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.

Authors

Real name:
Matthew Gustafson
Real name:
Ai He
Dr
Real name:
Research Member
University of Georgia
Real name:
Zhongling Qin