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Our paper quantifies climate risk exposure at the firm level by conducting a textual analysis of earnings call transcripts. Our goal of this website is to provide reliable and up-to-date data to help researchers and professionals make informed decisions.

Research Introduction

This research utilizes earnings call transcripts of U.S. public companies to quantify their climate risk exposure. The research introduces a novel approach, distinguishing between physical and transition climate risks and measuring firms' proactive responses. Overcoming challenges in textual analysis, the research validates the effectiveness of these measures. Notably, it explores the pricing effects of climate risk in equity markets, uncovering nuanced firm responses to transition risk. By examining investment, innovation, and employment outcomes, the research provides valuable insights into both financial market dynamics and real-world responses to climate change. The study's comprehensive approach, covering diverse sectors, offers a credible and timely assessment of climate risk exposure, addressing a critical gap in the current literature. One key finding of our study is that firms that face higher transition risk, especially those that do not respond proactively, are valued at a discount in the equity market. Horse-race analyses show that our measures offer unique value for studying how capital markets price climate risk, particularly transition risk.


1 / Measures_LSTY_092023

We use all earnings call data from January 2002 through December 2018 in our analysis, and obtain firms’ financial data from Compustat. We measure the climate risk faced by a given firm at a given time based on the share of earnings calls conversations that are centered on physical climate risk and transition risk, respectively.

Click to get our data. 

Please kindly cite our research when using the data:

"Qing Li, Hongyu Shan, Yuehua Tang, Vincent Yao, Corporate Climate Risk: Measurements and Responses, The Review of Financial Studies, Volume 37, Issue 6, June 2024, Pages 1778–1830,"

Our Team

This is our research team. 

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