The real effects of risk disclosures: evidence from climate change reporting in 10-Ks

We examine the economic impacts of risk disclosures in accounting reports on real decisions made by information senders (i.e., managers disclosing firms). In so doing, we exploit SEC rule enacted 2010 regarding climate change (CCR) reporting 10-Ks as a quasi-natural experimental setting which to apply difference-in-differences analysis. focus CCR because its vast influence activities and relative ease identifying managerial behaviors related change. Our results reveal that CCR-disclosing firms tend engage more (less) pro-environmental (anti-environmental) after rule. These effects are pronounced under higher pressure from climate-minded external stakeholders when firms’ businesses sensitive change-related risks. also find improved environmental performance terms reductions quantity, intensity, cost carbon emissions surrounding Overall, our findings suggest alter corporate help curb