Scandinavian Working Papers in Economics

Misum Working Paper Series,
Stockholm School of Economics, Mistra Center for Sustainable Markets (Misum)

No 2022-6: Climate Talk in Corporate Earnings Calls

Michał Dzieliński, Florian Eugster, Emma Sjöström () and Alexander F. Wagner
Additional contact information
Michał Dzieliński: Stockholm Business School, Stockholm University, Postal: Albanovägen , 114 19 , Stockholm
Florian Eugster: Mistra Center for Sustainable Markets (Misum), Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Emma Sjöström: Mistra Center for Sustainable Markets (Misum), Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Alexander F. Wagner: University of Zurich, CEPR, ECGI, and Swiss Finance Institute, Postal: Rämistrasse 71, 8006 Zürich , Switzerland

Abstract: Climate change is a major concern for many companies, but it has not historically featured much in earnings conference calls. We find a marked increase in climate talk on these calls in recent years. We also find that climate talk is negatively related to the change in CO2 emissions (especially Scope 2) in the year after the call, particularly in firms with high overall environmental and governance ratings. Conversely, investors react particularly negatively to climate talk when it comes from a firm with low levels of ESG performance or following poor earnings performance. Finally, a firm employs more climate talk when it is more material, when there is greater shareholder pressure or when it is better prepared for climate-related disclosure. Overall, these results suggest that investors and other stakeholders interested in corporate climate action should be paying attention to earnings conference calls as a source of useful information about companies’ broader stance on climate-related issues.

Keywords: climate talk; earnings calls; sustainability; CO2 emissions; greenwashing

JEL-codes: D83; G14; G34; G41; Q54

Language: English

46 pages, January 29, 2022

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