Climate policy uncertainty and corporate environmental risk-taking

Yongwon Kim, Young Kyu Park and Doojin Ryu

Finance Research Letters, 2025, vol. 82, issue C

Abstract: We examine the impact of climate policy uncertainty (CPU) on corporate environmental risk-taking and stock performance. Environmental incidents, especially those related to climate change, increase following high CPU periods. Furthermore, CPU lowers future stock returns, with a stronger effect following environmental incidents. We underscore the role of CPU in corporate risk-taking on environmental issues, which results in negative stock returns.

Keywords: Climate change; Climate policy uncertainty; Environment; Stock return (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325008141

DOI: 10.1016/j.frl.2025.107555

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