Heterogeneous investor attention to climate risk: Evidence from a unique dataset

ABSTRACT

The COVID-19 pandemic has led global investors to draw a parallel between pandemics and climate risk, focusing their attention on climate risk. We examine COVID-19’s effect on investors’ awareness of climate risk by analysing novel trading data for Korean-listed firms that include investor information. We observe that institutional investors divest from high-emission firms during the market crash induced by the COVID-19 pandemic, whereas individual investors do not, suggesting that investor attention to climate risk is heterogeneous.

KEYWORDS:

• Carbon emission
• climate change
• COVID-19
• ESG
• investor attention

JEL CLASSIFICATION:

• G10
• G20
• G41
• Q54

Disclosure statement

No potential conflict of interest was reported by the authors.

Acknowledgments

We appreciate the helpful comments and support from Christo Auret (Editor-in-chief), Robert Vivian (Editor), Joseph Fung (Editor), Robert Webb, Bart Frijns, Jiyoon Lee, Wonku Hong, and all participants of the “2022 SKKU International Conference: Trends in Digital Economy and Finance Sungkyunkwan University, Seoul, Korea Date: May 13, 2022”.