Do Financial Reports Adequately Disclose Extreme Wildfire Risk?

Paul Griffin (Distinguished Professor of Management, UC Davis)

Do Financial Reports Adequately Disclose Extreme Wildfire Risk?

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29 October 2020 from 5.30 pm - 7.00 pm 29 Oct 2020 5:30 pm 29 Oct 2020 7:00 pm

Rutherford House Lecture Theatre 1 (RHLT1)

Wildfires pose a significant risk that threatens firm value. That risk may have risen significantly in recent years in light of record-breaking wildfires in the United States and elsewhere. It is an open question, however, whether such increasing wildfire risk affects firms’ disclosures of wildfire-related information. We find that firms exposed to more wildfire days on average provide more textual 10-K disclosure of wildfire-related information in their filings compared to firms exposed to fewer wildfire days, but only for disclosures relating to past operations.