Climate risk disclosure and materiality: Two pressing problems

Description

Paul examines how security markets price the information in financial reports. While his early work concentrated on investors’ understanding of and response to financial measures of performance such as earnings and sales, his later work focuses on qualitative and non-financial measures of firm performance. He works now almost exclusively on how the climate crisis is shaping firms’ disclosure policies and how capital markets price information on firm-related climate impacts. He mostly finds that capital markets under-price the risks faced by climate change, including the costs and uncertainties of carbon emissions and the threat of increasingly uncertain extreme weather. In his recent publication in Nature: Energy, one of the world’s preeminent science journals, Professor Griffin warns “Despite increased awareness among investors, physical climate risk from extreme weather remains surprisingly unaccounted for in financial markets.”