Cheap Talk in Corporate Climate Commitments: The effectiveness of climate initiatives

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

Publication Language: English

Publication Type: Other publication type

Publication year: 2022

DOI: 10.2139/ssrn.3998435

Abstract

Corporate climate disclosures are considered an essential prerequisite to managing climate-related financial risks. At the same time, current disclosures are imprecise, inaccurate, and greenwashing-prone. We introduce a deep learning approach to enable comprehensive climate disclosure analyses by fine-tuning the ClimateBERT model. From 14,584 annual reports of the MSCI World index firms from 2010 to 2020, we extract the amount of cheap talk, defined as the share of precise versus imprecise climate commitments. We then test various hypotheses by linking three different climate initiatives, namely the Task Force on Climate-Related Financial Disclosure, the Science-Based Targets Initiative, and the Climate Action 100+, to the economic channels of signaling, credibility, and active engagement. In particular, we ask whether these initiatives decrease cheap talk by disciplining companies in how they define and disclose actionable climate commitments in their annual reports.

Authors with CRIS profile

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

Additional Organisation(s)

Juniorprofessur für Data Analytics

Involved external institutions

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

How to cite

APA:

Bingler, J.A., Kraus, M., Leippold, M., & Webersinke, N. (2022). Cheap Talk in Corporate Climate Commitments: The effectiveness of climate initiatives.

MLA:

Bingler, Julia Anna, et al. Cheap Talk in Corporate Climate Commitments: The effectiveness of climate initiatives. 2022.

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