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Comprehension, mapping and reporting of climate-related risks among listed firms in Sweden

Andersson, Fredrik N G LU orcid and Arvidsson, Susanne LU (2021) In LSR Working papers series
Abstract
We study the comprehension, mapping, and reporting of climate-related risks among firms listed on the NasdaqOMX stock exchange in Stockholm. Our study contains two parts: i) a study on the firms’ external communication through their annual reports, sustainability reports and webpages, and ii) a follow-up survey addressed to each firm’s management team. We find that firms are likely to engage in some form of mapping and reporting of climate-related risks. However, their comprehension of the nature of these risks, underlying problems, and what a climate transition implies varies across firms and industries. There are also substantial variations in the method employed to map and report climate- related risks. Our results... (More)
We study the comprehension, mapping, and reporting of climate-related risks among firms listed on the NasdaqOMX stock exchange in Stockholm. Our study contains two parts: i) a study on the firms’ external communication through their annual reports, sustainability reports and webpages, and ii) a follow-up survey addressed to each firm’s management team. We find that firms are likely to engage in some form of mapping and reporting of climate-related risks. However, their comprehension of the nature of these risks, underlying problems, and what a climate transition implies varies across firms and industries. There are also substantial variations in the method employed to map and report climate- related risks. Our results further suggest that firms use the Task Force on Climate-related Financial Disclosures’ recommendations (TCFD) on how to map and report climate risks as a learning tool to improve their climate-risk management. However, as a voluntary initiative it is insufficient to generate substantial change. Consequently, policymakers should focus on improving firms’ comprehension of what constitutes a climate-risk, how to map such risks and how to report them. The mapping and reporting of climate-related risk may otherwise prove an inefficient tool to redirect and accelerate investments promoting a low-carbon and climate-resilient economy. (Less)
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author
and
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
keywords
climate policy, climate change, climate-risk management, climate-related risks, non- financial reporting, TCFD, NFRD, M40, Q54, Q56, Q58
in
LSR Working papers series
issue
2021:06
pages
26 pages
language
English
LU publication?
yes
id
b5aeda8a-58b2-4d6a-ae5c-65d7d4d22074
date added to LUP
2021-10-13 12:49:03
date last changed
2021-10-13 13:54:12
@misc{b5aeda8a-58b2-4d6a-ae5c-65d7d4d22074,
  abstract     = {{We study the comprehension, mapping, and reporting of climate-related risks among firms listed on the  NasdaqOMX  stock exchange  in  Stockholm.  Our  study contains  two  parts:  i) a  study  on  the firms’  external communication through their annual reports, sustainability reports and webpages, and ii) a  follow-up survey addressed to each firm’s management team. We find that firms are likely to engage in  some form of mapping and reporting of climate-related risks. However, their comprehension of the  nature of these risks, underlying problems, and what a climate transition implies varies across firms and  industries. There are also substantial variations in the method employed to map and report climate- related risks. Our results further suggest that firms use the Task Force on Climate-related Financial  Disclosures’ recommendations (TCFD) on how to map and report climate risks as a learning tool to  improve their climate-risk management. However, as a voluntary initiative it is insufficient to generate  substantial change. Consequently, policymakers should focus on improving firms’ comprehension of  what  constitutes  a  climate-risk,  how  to  map  such  risks  and  how  to  report  them.  The  mapping  and  reporting  of  climate-related  risk  may  otherwise  prove  an  inefficient  tool  to  redirect  and  accelerate  investments promoting a low-carbon and climate-resilient economy.}},
  author       = {{Andersson, Fredrik N G and Arvidsson, Susanne}},
  keywords     = {{climate policy; climate change; climate-risk management; climate-related risks; non- financial reporting; TCFD; NFRD; M40; Q54; Q56; Q58}},
  language     = {{eng}},
  note         = {{Working Paper}},
  number       = {{2021:06}},
  series       = {{LSR Working papers series}},
  title        = {{Comprehension, mapping and reporting of climate-related risks among listed firms in Sweden}},
  url          = {{https://lup.lub.lu.se/search/files/107584235/AnderssonArvidsson0621.pdf}},
  year         = {{2021}},
}