CEO political ideology and corporate climate risk disclosure

This study explores whether the political ideology of chief executive officers (CEOs) influences firms’ narrative climate risk disclosure. Based on a sample of S&P 1500 firms over a 28-year period, we use CEOs’ individual political donations to measure their political ideology and employ text analysis of firms’ quarterly earnings conference calls to quantify climate risk disclosure. We find that firms led by Democratic-leaning CEOs provide less climate risk disclosure than those led by Republican-leaning CEOs, via capital structure and green reputation mechanisms. This relation is more pronounced for firms led by CEOs with greater managerial discretion.