Cheap Talk and Cherry-Picking: What ClimateBert has to say on Corporate Climate Risk Disclosures

Bingler JA, Kraus M, Leippold M, Webersinke N (2022)

Publication Language: English

Publication Type: Journal article

Publication year: 2022

Journal

Finance Research Letters Elsevier

Book Volume: 47

Pages Range: 102776

DOI: 10.1016/j.frl.2022.102776

Open Access Link: https://doi.org/10.1016/j.frl.2022.102776

Abstract

Disclosure of climate-related financial risks greatly helps investors assess companies' preparedness for climate change. Voluntary disclosures such as those based on the recommendations of the Task Force for Climate-related Financial Disclosures (TCFD) are being hailed as an effective measure for better climate risk management. We ask whether this expectation is justified. We do so with the help of a deep neural language model, which we christen ClimateBert. In analyzing the disclosures of TCFD-supporting firms, ClimateBert comes to the sobering conclusion that the firms' TCFD support is mostly cheap talk and that firms cherry-pick to report primarily non-material climate risk information.

Authors with CRIS profile

Mathias Kraus Juniorprofessur für Data Analytics Nicolas Webersinke Lehrstuhl für Betriebswirtschaftslehre, insbesondere Finanzierung und Banken

Involved external institutions

Eidgenössische Technische Hochschule Zürich (ETHZ) / Swiss Federal Institute of Technology in Zurich CH Switzerland (CH) University of Zurich / Universität Zürich (UZH) CH Switzerland (CH)

How to cite

APA:

Bingler, J.A., Kraus, M., Leippold, M., & Webersinke, N. (2022). Cheap Talk and Cherry-Picking: What ClimateBert has to say on Corporate Climate Risk Disclosures. Finance Research Letters, 47, 102776. https://dx.doi.org/10.1016/j.frl.2022.102776

MLA:

Bingler, Julia Anna, et al. "Cheap Talk and Cherry-Picking: What ClimateBert has to say on Corporate Climate Risk Disclosures." Finance Research Letters 47 (2022): 102776.

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