How do Climate Change Strategy Disclosure and Investment Horizon Jointly Influence Investor Judgments?

Dani Puspitasari, John Cw Ko, Soon-Yeow Phang and Ashna Prasad

European Accounting Review, 2025, vol. 34, issue 3, 901-925

Abstract: Disclosure demands from investors have led companies to increasingly disclose their climate change strategies, which may vary in framing features. Strategy variations include emphasizing the desirability (rationale for climate change goals) or feasibility (means to achieve these goals) features. We experimentally examine whether and how these framing features and the investment horizon jointly affect investors’ judgments. Drawing on construal level theory, we find that short-term investors are significantly more willing to invest when a company’s disclosures emphasize feasibility over desirability features. In contrast, long-term investors exhibit no significant difference in willingness to invest, regardless of the framing features in these disclosures. We find that feelings of fluency in processing the information drive the effect of feasibility features on short-term investors’ willingness to invest. This feeling, in turn, enhances perceived management communicative competence, increasing short-term investors’ willingness to invest. We also conduct supplementary experiments to rule out the influence of the firm’s operating performance and the positivity of the news between the framing features on these results. The findings contribute to the understanding that the framing features in a climate change strategy disclosure are material to investors’ decision-making, which has implications for regulators and companies.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09638180.2024.2305776 (text/html)
Access to full text is restricted to subscribers.

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:taf:euract:v:34:y:2025:i:3:p:901-925

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REAR20

DOI: 10.1080/09638180.2024.2305776

Access Statistics for this article

European Accounting Review is currently edited by Laurence van Lent

More articles in European Accounting Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().