This paper investigates the effect of climate risk on systemic financial risks by employing the network approach. Our results demonstrate that climate risk not only affects a single financial market, but also induces risk co-movement, which aggravates potential systemic financial risks. More...

Using a large sample of firms from 45 countries, we find that firms in countries with high climate risk reduce their cash dividends but increasingly use share repurchases to make payouts. The evidence suggests that firms substitute dividends with repurchases to increase their payout flexibility...

We study whether climate risk will affect the stock returns of fossil fuel companies in international markets. Our results show that in the world market, a 1% increase in climate risk will increase the stock returns of fossil fuel companies by 85 BP to 121 BP. We also prove that this climate...

Large emitters reduced their carbon emissions by around 12% after the 2015 Paris Agreement (“the Agreement”) relative to public firms that are less in the limelight. We show that this effect is driven by divestments. Large emitters are 9 p.p. more likely to divest pollutive assets in the...

This paper examines to what extent information opacity exacerbates climate risks in supply chains. Understanding the information frictions in supply chain settings is important because disruptions originating from an opaque supplier can impose greater risk to the supply chain as a whole than...

We examine the impact of climate risks on the nexus of clean energy and technology stocks using a time-varying correlation model. We find that physical and transition climate risks are positively associated with the long-term correlation between clean energy and technology stock indices, whereas...