Understanding climate-related disclosures of UK financial institutions

Jonathan Acosta-Smith (), Benjamin Guin, Mauricio Salgado-Moreno () and Quynh-Anh Vo
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Jonathan Acosta-Smith: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH
Mauricio Salgado-Moreno: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH

No 1017, Bank of England working papers from Bank of England

Abstract: Climate-related disclosures reduce information asymmetries between firms and investors and help transition to a net zero economy. However, disclosure practices might differ across firms. We explore the determinants of firm disclosures by creating a unique, firm-level panel data set on climate-related disclosures of UK financial institutions. To that end, we apply Natural Language Processing techniques with Machine Learning classifiers on unique textual data which we hand-collected from their published reports. We document differences in disclosure levels across financial institutions with different sizes and over time. We show that climate‑related policy communications in the form of regulatory guidance on future mandatory disclosures is associated with a catch-up by firms previously disclosing less.

Keywords: Climate-related disclosures; market discipline; Task Force on Climate-Related Financial Disclosures (TCFD) and Natural Language Processing (NLP). (search for similar items in EconPapers)
JEL-codes: C40 C80 G20 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2023-03-10
New Economics Papers: this item is included in nep-ban, nep-bec, nep-big, nep-ene, nep-env, nep-eur and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:1017

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