Impact of Climate Change on Firm Earnings Evidence from Temperature Anomalies

Artur Hugon, Kelvin Law

2019 | Academic | Climate, Valuation

This study examines the impact of climate change on firm earnings, and how well managers anticipate the impact. Firm-level regressions indicate there are some “winners” with about one-third of individual firms benefitting from a warmer climate. Finally, managers of firms which are the most susceptible to a warmer climate tend to underestimate the negative impact on earnings, and this problem is more severe in states where climate change skepticism is high.