How cheap talk in climate disclosures relates to climate initiatives, corporate emissions, and reputation risk

• DOI: 10.1016/j.jbankfin.2024.107191
• Publication Date: 2024-04-29T15:37:04Z
• Authors: Julia Anna Bingler; Mathias Kraus; Markus Leippold; Nicolas Webersinke
• Keywords: Climate risk; Climate Justice

Navigating the complex landscape of corporate climate disclosures and their real impacts is crucial for managing climate-related financial risks. However, current oftentimes suffer from imprecision, inaccuracy, greenwashing. We introduce ClimateBert CTI, a deep learning algorithm, to identify cheap talk in MSCI World index firms' annual reports. find that only targeted engagement associated with less talk. Voluntary are more Moreover, correlates increased negative news coverage higher emissions growth. Hence, helps assess initiatives' effectiveness anticipate reputation transition risk exposure.