Climate risk disclosures: Why more information isn’t always better for investors by Professor Simone Varotto

Professor Simone Varotto analysed the financial reports of UK-listed companies from 1996-2018 and found a surprising pattern in how markets respond to different types of climate disclosures after natural disasters strike.

News in Detail

The article reflects a study that revealed a counterintuitive truth about corporate climate disclosures: more disclosure doesn’t necessarily translate to better market performance during climate-related emergencies.

Companies that simply disclosed their exposure to climate risks saw smaller stock price declines following disasters compared to their non-disclosing peers. Yet, firms that went further by detailing their climate adaptation strategies experienced stock price drops just as severe as companies that made no disclosures at all.

Next Steps

News in Detail

Professor Simone Varotto

Professor of Finance

Published	26 February 2025
Topics: Research news

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