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Full-Text Articles in Business
Climate-Risk Materiality And Firm Risk, Ella Mae Matsumura, Rachna Prakash, Sandra C. Vera-Muñoz
Climate-Risk Materiality And Firm Risk, Ella Mae Matsumura, Rachna Prakash, Sandra C. Vera-Muñoz
Faculty and Student Publications
Managers are required to disclose material climate risk in Form 10-K, but their decision whether or not to disclose is confounded by the lack of consensus on whether climate risk is material to the firms, as well as uncertainty about enforcement of disclosure regulations. Using the SASB Materiality Map™ to proxy for market expectations of climate risk materiality, we test whether the association between disclosing climate risk in 10-Ks and firm risk (proxied by cost of equity (COE)) varies with market expectations of climate risk materiality. Using S&P 500 firms’ decisions whether to disclose climate risk in Form 10-K for …