Firm Politics in an Era of Climate Crisis

Session Submission Type: Full Paper Panel

Session Description

This panel features cutting-edge work on the intersection of climate change, decarbonization, and firm politics. Around the world, the private sector is increasingly attentive to climate change and the low-carbon energy transition. Firms are investing more resources in analyzing climate-related risks to their portfolios, standing up sustainability departments, developing ESG/corporate social responsibility policies, and lobbying governments on the issue. Several papers on this panel dissect the roots of firm action on climate. Cao and Zhao (Paper 1) analyze how firms’ political behavior varies with the climate-related risks they face, finding that it is principally regulatory risks — not physical climate risks — that shape firm decision-making. Travaglini (Paper 2), however, finds that when those physical climate risks manifest — when natural disasters occur — firm opposition to environmental policies declines. Lomov and Mahdavi (Paper 3) consider the role of stakeholders in shaping climate action by firms, finding via a novel mixed-method approach that firms with more myopic stakeholders release less climate-related information absent mandatory disclosure rules. Cory, Lerner, and Osgood (Paper 4) examine the specific role of company employees in dictating corporate action on climate, finding that firms with more pro-climate workers adopt substantially more pro-climate reforms. The final paper, by Thrall and Zucker (Paper 5), assesses the effects of growing firm interest in climate, showing that it reorients labor markets, drains regulatory agencies of climate expertise, and hampers the government’s ability to issue and enforce effective climate policies.

Sub Unit

• Division 6: Political Economy

Individual Presentations

• Do Firm-Level Climate Risks Drive Firm Political Actions in Climate Change? - Xun Cao, Penn State University; Lingbo ZHAO, Pennsylvania State University

• Polluting Companies’ Lobbying Behavior When Evidence of Climate Change Increases - Giulia Leila Travaglini, Columbia University

• Climate Disclosure in the Fossil Fuel Industry - Paasha Mahdavi, University of California, Santa Barbara; Denis Lomov, University of California, Santa Barbara

• Vox Employee: Green Workers and Corporate Climate Action - Jared Cory, University of Michigan; Michael Henry Lerner, London School of Economics; Iain Osgood, University of Michigan, Ann Arbor

• Public or Private? Demand Shocks and the Market for Climate Experts - Simran Singh; Calvin Thrall, Columbia University; Noah Zucker, London School of Economics

Chair

• Patrick Bayer University of Glasgow

Discussant

• Patrick Bayer University of Glasgow