 Climate policy uncertainty and analyst forecast quality for greenhouse gas-intensive firmsK.C. Lin and Xiaobo Dong Advances in accounting, 2025, vol. 68, issue C Abstract: This study examines the impact of climate policy uncertainty (CPU) on financial analysts' ability to forecast the performance of greenhouse-gas (GHG)-intensive firms. We measure CPU using the Gavriilidis (2021) CPU index, which we validate by confirming its correlation with climate-related legislative activities and its distinction from general economic uncertainty indices. Our findings reveal that CPU negatively impacts forecast quality, increasing dispersion and reducing accuracy, especially for long-term earnings forecasts. Political gridlock, characterized by a divided government and ideological polarization in Congress, mitigates the negative effects of CPU. Furthermore, GHG-intensive firms with higher-quality financial disclosures and those followed by more skilled analysts experience less deterioration in forecast quality due to CPU. Finally, GHG-intensive firms that increase climate-related discussions during earnings calls in periods of high CPU mitigate the adverse impact on forecast quality. Keywords: Climate policy uncertainty; Greenhouse gas reporting program; Analyst forecast dispersion; Analyst forecast accuracy; Political gridlock; Financial disclosure quality; Analyst forecast expertise (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:68:y:2025:i:c:s0882611025000124 DOI: 10.1016/j.adiac.2025.100817 Access Statistics for this article Advances in accounting is currently edited by Dennis Caplan More articles in Advances in accounting from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.