The impact of climate risk disclosure on corporate valuation and investor behavior: an economic study using global regulatory data

Climate risk disclosure has emerged as an additional component of financial regulation globally, although its influence on the company value and investor behavior, particularly in transitional economies, has not been studied in depth. In order to estimate the impact of climate risk disclosure on firm value and investor behavior, this research uses panel data on 1,840 firms in 30 countries, including Uzbekistan and other emerging markets over the period of 2018-2024. Climate risk disclosure index was computed taking into account the dimensions of quality, quantity, and timeliness of climate risk disclosure according to TCFD principles. Company value was calculated using Tobin’s Q indicator and the investor behavior – institutional ownership share. It is evident from the results that a 10 percentage point rise in the disclosure index leads to a rise in Tobin’s Q by 0.035 points and in institutional ownership by 0.47 percentage points. Results based on instrumental variable estimations provide even bigger coefficients (0.52 and 7.25). Event studies have proved the positive response of the market on the announcement of mandatory disclosure rules (CAR = 0.72%). However, this effect is not significant for emerging markets and institution quality plays a positive moderating role.

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