Climate talk in earnings calls: effects on analyst forecasts and environmental management

We examine the information content of climate discussions during corporate earnings conference calls, and its implications for financial analyst forecasts, and corporate environmental management. We use a dataset of 48,329 observations from 6,696 U.S. firms. Our analysis reveals that increased climate-related discourse by executives, potentially as a form of impression management, is associated with higher analyst forecast bias and dispersion. Furthermore, such discussion captures analyst attention, leading to more climate-focused inquiries. Subsequent findings indicate that firms enhance their environmental performance in the following year when analysts pose climate-related questions, suggesting that these dialogues may drive corporations to improve their environmental efforts to meet stakeholder expectations and maintain legitimacy. We also observe that executives often respond to climate inquiries with complex, subjective, and positively toned statements.