Climate change exposure, oil price uncertainty, and managerial ownership: Insights from textual analysis

• Oil price uncertainty misaligns strategic priorities, raising climate change risks. • Managerial ownership reduces regulatory risks amid oil price volatility. • Firms face increased regulatory risks but find new opportunities in uncertainty. • Stable impact of oil price uncertainty on climate exposure over time. We examine the impact of oil price uncertainty on firm-specific climate change exposure, with a focus on the moderating role of managerial ownership. Using a comprehensive dataset generated from sophisticated textual analysis of conference earnings calls, we find that oil price uncertainty significantly increases overall climate change exposure, with managerial ownership playing a crucial moderating role. Firms with higher managerial ownership demonstrate reduced regulatory risks and enhanced new business opportunities in response to oil price volatility. Moreover, we explore how the effect of oil price uncertainty on climate change exposure evolves over time and find that the strength of this effect remains stable. These results highlight the importance of aligning managerial incentives with long-term sustainability goals to mitigate climate risks and capitalize on emerging opportunities.