Climate Sentiment Analysis on the Disclosures of the Corporations Listed on the Johannesburg Stock Exchange

Yolanda S. Stander ()
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Yolanda S. Stander: School of Accounting, College of Business & Economics, University of Johannesburg, Auckland Park, P.O. Box 524, Johannesburg 2006, South Africa

JRFM, 2025, vol. 18, issue 9, 1-25

Abstract: International organizations have highlighted the importance of consistent and reliable environment, social and governance (ESG) disclosure and metrics to inform business strategy and investment decisions. Greater corporate disclosure is a positive signal to investors who prioritize sustainable investment. In this study, economic and climate sentiment are extracted from the integrated and sustainability reports of the top 40 corporates listed on the Johannesburg Stock Exchange, employing domain-specific natural language processing. The intention is to clarify the complex interactions between climate risk, corporate disclosures, financial performance and investor sentiment. The study provides valuable insights to regulators, accounting professionals and investors on the current state of disclosures and future actions required in South Africa. A time series analysis of the sentiment scores indicates a noticeable change in the corporates’ disclosures from climate-related risks in the earlier years to climate-related opportunities in recent years, specifically in the banking and mining sectors. The trends are less pronounced in sectors with good ESG ratings. An exploratory regression study reveals that climate and economic sentiments contain information that explain stock price movements over the longer term. The results have important implications for asset allocation and offer an interesting direction for future research. Monitoring the sentiment may provide early-warning signals of systemic risk, which is important to regulators given the impact on financial stability.

Keywords: sustainability reporting; natural language processing; Johannesburg Stock Exchange; sustainable development goals; ESG; greenwashing; climate change; climate sentiment; economic sentiment; systemic risk (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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