The value relevance of US firms’ mandated financial risk disclosures attributable to the impact of climate change

The impact of climate change on firms and, by extension, on economies is considered important for economic outcomes. This leads to the question of whether disclosures made by US firms concerning financial risks attributable to climate change, as mandated by general SEC regulations for reporting material financial risks during the period studied, have economic content. Our research explores the economic relevance of financial risk disclosures. attributable to climate change. We employ the level of analyst following as a measure of economic relevance and find that, all other things being equal, more disclosures of financial risk attributable to climate change are associated with higher levels of analyst followings in subsequent years. This suggests that such disclosures provide economically relevant information. Lastly, we outline the limitations of our study and suggest potential avenues for future research.