Showing off cleaner hands: mandatory climate-related disclosure by financial institutions and the financing of fossil energy

We investigate the real effects of mandatory climate-related disclosure by financial institutions on funding carbon-intensive industries. Our impact metric is amount invested into securities, bonds and stocks, issued fossil fuel companies. A French law, which came force in January 2016 aftermath Paris Agreement climate change, provides us with a quasi-natural experiment. The new regulation, unique Europe at that time, requires institutional investors (i.e., insurers, pension funds asset management firms), but not banks, to report annually both their exposure change mitigation policy. Using dataset security-level portfolio holdings each sector euro area country, we compare choices those banks all located other EA countries. find subject requirements curtailed financing energy companies some 40% compared control group.