The impact of governance quality on corporate climate risk disclosure: The role of the governance committee

Damian Honey, Tanveer Ahsan and Stefania Migliori

International Review of Financial Analysis, 2025, vol. 98, issue C

Abstract: This study explores the relationship between corporate governance quality (CGQ) and corporate climate risk disclosure (CCRD), which aligns with the 13th Sustainable Development Goal. We apply text mining techniques to compute a unique CCRD score using manually collected annual reports of French SBF-120 nonfinancial firms listed from 2012 to 2022. Using an index-based measure of CGQ, the regression analyses investigate the association between CGQ and CCRD while considering the influence of the corporate governance committee. The empirical results reveal a substantive association between CGQ and CCRD: Better CGQ corresponds to higher CCRD, particularly after voluntary climate risk disclosure guidelines were introduced in 2017. The results also confirm the importance of the corporate governance committee, as its presence enhances the significance of the impact of CGQ on CCRD. These findings indicate that better CGQ reduces agency conflicts, aligns stakeholders' and managers' interests, and enhances the CCRD of French firms. These results are robust to alternative proxies of CCRD and CGQ and different regression models and techniques.

Keywords: Corporate governance quality; Corporate climate risk disclosure; Governance committee; SBF-120; Panel data (search for similar items in EconPapers)
JEL-codes: C23 G30 Q01 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:98:y:2025:i:c:s1057521924008330

DOI: 10.1016/j.irfa.2024.103901

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