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Automated Identification of Climate Risk Disclosures in Annual Corporate Reports

David Friederich, Lynn H. Kaack, Alexandra Luccioni, Bjarne Steffen

arXiv 3 Aug 2021 · Computers and Society · 15 citations (OpenAlex)

arXiv:2108.01415 · PDF · DOI · OpenAlex · Extracted main text

Abstract

It is important for policymakers to understand which financial policies are effective in increasing climate risk disclosure in corporate reporting. We use machine learning to automatically identify disclosures of five different types of climate-related risks. For this purpose, we have created a dataset of over 120 manually-annotated annual reports by European firms. Applying our approach to reporting of 337 firms over the last 20 years, we find that risk disclosure is increasing. Disclosure of transition risks grows more dynamically than physical risks, and there are marked differences across industries. Country-specific dynamics indicate that regulatory environments potentially have an important role to play for increasing disclosure.

Citation extraction

21
references
31
in-text mentions
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distinct cited
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self-citations
2,992
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Kölbel, J. F., Leippold, M., Rillaerts, J., and Wang, Q (2020) Does the CDS market reflect regulatory climate risk disclosures?0.73732100%
2TCFD (2019) Task Force on Climate-related Financial Disclosures: Status Report, 20190.73732100%
3Steffen, B (2021) A comparative analysis of green financial policy output in oecd countries self0.64422100%
4Climate Disclosure Standards Board (CDSB) (2020) Falling short?, May 20200.51121100%
5Demaria, S. and Rigot, S (2019) A new measure of environmental reporting practice based on the recommendations of the Task Force on Climate-related Financial Di…0.51121100%
6Semieniuk, G., Campiglio, E., Mercure, J.-F., Volz, U., and Edwards,… (2020) Low-carbon transition risks for finance0.51121100%
7Liu, Y., Ott, M., Goyal, N., Du, J., Joshi, M., Chen, D., Levy, O.,… (2019) RoBERTa: A Robustly Optimized BERT Pretraining Approach0.51121100%
8Sanh, V., Debut, L., Chaumond, J., and Wolf, T (2019) DistilBERT, a distilled version of BERT: smaller, faster, cheaper and lighter0.51121100%
9The White House (2021) Executive Order on Climate-Related Financial Risk0.40511100%
10EUR-Lex Access to European Union law0.40511100%

Showing the top 10 of 21 scored citations.