Work

Climate change exposure and mutual fund ownership

Year: 2026

Type: article

Abstract: Using a sample of U.S. firms and a text-based measure of managerial and analyst attention to climate change issues during earnings calls, we document a negative association between firms' climate change exposure and changes in U.S. mutual fund ownership, suggesting U.S. mutual funds' cautious investment approach to climate change. We further provide causal evidence for this relation using the staggered adoptions of state-level climate change adaptation plans and renewable portfolio standards. Additional analyses show that our finding is driven by climate-related opportunities and regulatory risks, rather than physical risks. Changes in U.S. mutual fund ownership reflect concerns over firms' transition risks and stock performance pressures. Extending the analysis to non-U.S. mutual funds, we find similar results among funds domiciled in countries with strong environmental norms.

Source: The British Accounting Review

DOI: 10.1016/j.bar.2026.101846

Authors: Zhonghao Jiang, Yukun Shi, Lu Xing

Institutions: Newcastle University, University of Glasgow, University of Bath

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: hybrid

Estimated APC paid: $3,770