Work

Dividends in the storm: Navigating firm-level climate change risk exposure

Year: 2026

Type: article

Abstract: Exploiting a cross-country sample of 3213 firms operating in 28 countries during the period 2002-2020, we find that firm-level climate change exposure is negatively associated to firms’ dividend policy. Based on the precautionary behaviour of firms, we find that stock market volatility and systematic risk are two economic channels explaining the negative effect of climate change risk on dividends. Robust to additional tests and quasi-natural experiments built around three major natural disasters, we confirm that climate change risk directly harms the dividend distribution. Taken together, our evidence suggests that shareholders should consider the dividend reduction potential effect associated with firm-level climate change. • We study how firm-level climate change risk affects corporate dividend policy. • Analysis uses a global sample of 3,213 listed firms across 28 countries (2002–2020). • Higher climate risk exposure significantly reduces dividend distributions. • Stock volatility and systematic risk are key channels linking climate risk to dividends. • Natural disasters strengthen the negative causal effect of climate risk on dividends.

Source: Research in International Business and Finance

DOI: 10.1016/j.ribaf.2026.103430

Authors: Marco Di Antonio, Laura Nieri, Giulio Velliscig

Institutions: University of Genoa, University of Udine

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Climate action

Open Access status: hybrid

Estimated APC paid: $3,820