Textual Analysis of Climate-Related Disclosures
When faced with difficult issues such as climate change, some organizations decide to disclose information on relevant risks, opportunities, and strategies. The language used in these disclosures can theoretically reflect how managers process information in complex and uncertain environments, and by extension, their abilities in creating value for the firm. This research collaboration examines linkages between the language of climate-related disclosures and firm performance. From a theoretical perspective, findings from this collaboration could explain why different firms experience different outcomes when faced with complex issues. From a practical perspective, this collaboration could help establish foundational knowledge to evaluate the capabilities of firms in complex environments.