Can Climate Risk Disclosure Attract Analyst Coverage? A Study Based on the Dual Perspective of Information Supply and Demand

Mengxue Li and Sheng Yao ()
Additional contact information
Mengxue Li: School of Economics and Management, China University of Mining and Technology, Xuzhou 221116, China
Sheng Yao: School of Management, Shanghai University, Shanghai 200444, China

Sustainability, 2025, vol. 17, issue 9, 1-25

Abstract: In the context of the intensifying global climate change and its associated risks, the interaction between corporate climate risk disclosure and analyst forecasting behavior has become a pivotal scholarly focus in sustainability research. This study uses a sample of 20,978 firm-year observations from non-financial Chinese A-share listed companies over the period 2007–2021 to examine the impact of corporate climate risk disclosure on analyst coverage, applying ordinary least squares (OLS) regression. The results reveal a positive relationship between corporate climate risk disclosure and analyst coverage. This positive effect is more prominent in firms with lower annual report readability, a higher proportion of independent institutional investors, and in contexts involving team analysts or analysts from large brokerage firms. Mechanism analysis reveals two pathways for increased analyst coverage: increasing institutional investors’ demand for information and reducing analysts’ reliance on on-site research to uncover private information. Further research reveals that severe and chronic risk disclosures attract more analyst coverage than transition risk disclosures. Additionally, climate risk disclosure can significantly reduce analyst forecast dispersion and long-term forecast bias. Overall, this study holds important implications for improving corporate climate risk disclosure practices and enhancing analysts’ role as information intermediaries.

Keywords: climate risk; climate risk disclosure; analyst coverage; analyst forecast bias; analyst forecast dispersion (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/9/3960/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/9/3960/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:9:p:3960-:d:1644477

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().