DP19189 Do firms walk the climate talk?
Managers refer more to climate-related topics on earnings conference calls when climate matters are more material for a firm. However, there is also a large unexplained variation in climate talk. Employing a global sample of firms, we find that this extra climate talk is negatively related to the change in CO2 emissions in the years after the call. After the Paris Agreement, only remarks in answers continue to predict emission changes, suggesting that climate talk has become a staple in prepared managerial remarks. In the US, individualistic cultures, and cultures characterized by short-term horizons, climate talk does not predict emission reductions, and in these settings, stock prices also react negatively to climate talk. Overall, these results suggest that firms generally walk the climate talk, but the credibility of such talk varies among firms.
