Are climate change risks priced in the US stock market?

Analysis - February 2021 - No. 3

Authors Faccini, Renato; Matin, Rastin
Subject Climate; Financial stability; Statistical method
Type Analysis
Year 2021
Published 8 February 2021
Abstract icon We construct measures of physical and transition risks by conducting textual analysis of climate news. Using U.S. stock prices, we find that only the short-term risks elicited by the political debate are priced. Longer running risks elicited by news on international summits, global warming and natural disasters are not priced.