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http://hdl.handle.net/10397/94400
Title: | The real effects of risk disclosures : evidence from climate change reporting in 10-Ks | Authors: | Kim, JB Wang, C Wu, F |
Issue Date: | 2022 | Source: | Review of accounting studies, 2022, https://doi.org/10.1007/s11142-022-09687-z | Abstract: | We examine the economic impacts of risk disclosures in accounting reports on the real decisions made by information senders (i.e., managers of the disclosing firms). In so doing, we exploit the SEC rule enacted in 2010 regarding climate change risk (CCR) reporting in 10-Ks as a quasi-natural experimental setting in which to apply a difference-in-differences analysis. We focus on CCR because of its vast influence on economic activities and the relative ease of identifying managerial behaviors related to climate change. Our results reveal that CCR-disclosing firms tend to engage more (less) in pro-environmental (anti-environmental) activities after the SEC 2010 rule. These real effects are more pronounced in firms that are under higher pressure from climate-minded external stakeholders and when firms’ businesses are more sensitive to climate change-related risks. We also find improved environmental performance in terms of reductions in the quantity, intensity, and cost of carbon emissions surrounding the SEC 2010 rule. Overall, our findings suggest that CCR disclosures alter corporate behaviors and help curb climate change. | Keywords: | Risk disclosure Climate change Real effect 10-K |
Publisher: | Springer | Journal: | Review of accounting studies | ISSN: | 1380-6653 | DOI: | 10.1007/s11142-022-09687-z | Rights: | © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2022 This version of the article has been accepted for publication, after peer review (when applicable) and is subject to Springer Nature’s AM terms of use (https://www.springernature.com/gp/open-research/policies/accepted-manuscript-terms), but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: http://dx.doi.org/10.1007/s11142-022-09687-z |
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