Climate Risk and Corporate Investment

This review examines climate risk and corporate investment. The organizing question is how physical and transition risks influence capital expenditure, financing, innovation, and asset retirement. Ten related scholarly sources are synthesized through a decision-centered framework spanning problem definition, mechanism, measurement, evaluation, implementation, and governance. The review does not invent experiments, pooled estimates, or unreported quantitative results. It instead evaluates the strength and transferability of the available evidence, with particular attention to interpreting disclosure or market repricing as direct evidence of real-economy transition. The resulting framework links technical or empirical performance to explicit use conditions and identifies tests that should precede wider adoption in corporate finance and sustainable investment.

1. Albitar, K., Al-Shaer, H., & Liu, Y. S. (2022). Corporate commitment to climate change: The effect of eco-innovation and climate governance. Research Policy, 52(2), 104697. https://doi.org/10.1016/j.respol.2022.104697 DOI
2. Arian, A., & Naeem, M. A. (2025). Climate risk and corporate investment behavior in emerging economies. Emerging Markets Review, 65, 101257. https://doi.org/10.1016/j.ememar.2025.101257 DOI
3. Bingler, J. A., Kraus, M., Leippold, M., & Webersinke, N. (2022). Cheap talk and cherry-picking: What ClimateBert has to say on corporate climate risk disclosures. Finance research letters, 47, 102776. https://doi.org/10.1016/j.frl.2022.102776 DOI
4. Dahlmann, F., Branicki, L., & Brammer, S. (2017). Managing Carbon Aspirations: The Influence of Corporate Climate Change Targets on Environmental Performance. Journal of Business Ethics, 158(1), 1-24. https://doi.org/10.1007/s10551-017-3731-z DOI
5. Dietz, S., Bowen, A., Dixon, C., & Gradwell, P. (2016). ‘Climate value at risk’ of global financial assets. Nature Climate Change, 6(7), 676-679. https://doi.org/10.1038/nclimate2972 DOI
6. Li, Q., Shan, H., Tang, Y., & Yao, V. (2024). Corporate Climate Risk: Measurements and Responses. Review of Financial Studies, 37(6), 1778-1830. https://doi.org/10.1093/rfs/hhad094 DOI
7. Liesen, A., Figge, F., Hoepner, A., & Patten, D. M. (2016). Climate Change and Asset Prices: Are Corporate Carbon Disclosure and Performance Priced Appropriately?. Journal of Business Finance &amp Accounting, 44(1-2), 35-62. https://doi.org/10.1111/jbfa.12217 DOI
8. Ozkan, A., Temiz, H., & Yildiz, Y. (2022). Climate Risk, Corporate Social Responsibility, and Firm Performance. British Journal of Management, 34(4), 1791-1810. https://doi.org/10.1111/1467-8551.12665 DOI
9. Ren, X., Li, W., & Li, Y. (2024). Climate risk, digital transformation and corporate green innovation efficiency: Evidence from China. Technological Forecasting and Social Change, 209, 123777. https://doi.org/10.1016/j.techfore.2024.123777 DOI
10. Steiger, R., Scott, D., Abegg, B., Pons, M., & Aall, C. (2017). A critical review of climate change risk for ski tourism. Current Issues in Tourism, 22(11), 1343-1379. https://doi.org/10.1080/13683500.2017.1410110 DOI