Climate Change Exposure and Mutual Fund Ownership

Zhonghao Jiang; Yukun Shi; Lu Xing

doi:10.1016/j.bar.2026.101846

Climate Change Exposure and Mutual Fund Ownership

Zhonghao Jiang, Yukun Shi, Lu Xing

Research output: Contribution to journal › Article › peer-review

Abstract

Using a sample of U.S. firms and a text-based measure of managerial and analyst attention to climate change issues during earnings calls, we document a negative association between firms’ climate change exposure and changes in U.S. mutual fund ownership, suggesting U.S. mutual funds’ cautious investment approach to climate change. We further provide causal evidence for this relation using the staggered adoptions of state-level climate change adaptation plans and renewable portfolio standards. Additional analyses show that our finding is driven by climate-related opportunities and regulatory risks, rather than physical risks. Changes in U.S. mutual fund ownership reflect concerns over firms’ transition risks and stock performance pressures. Extending the analysis to non-U.S. mutual funds, we find similar results among funds domiciled in countries with strong environmental norms.

Original language	English
Article number	101846
Journal	The British Accounting Review
Early online date	13 Feb 2026
DOIs	https://doi.org/10.1016/j.bar.2026.101846
Publication status	E-pub ahead of print - 13 Feb 2026

Data Availability Statement

Data will be made available on request.

Acknowledgements

We are grateful for the helpful comments from Woon Sau Leung and Jonathan Lee. We are grateful for the comments from the discussants and participants at the seminars.

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or non-profit sectors.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 7 Affordable and Clean Energy
SDG 13 Climate Action

Keywords

Climate change exposure
Climate risks
Mutual fund ownership
Transition risks

ASJC Scopus subject areas

Accounting

Access to Document

10.1016/j.bar.2026.101846Licence: CC BY

Cite this

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abstract = "Using a sample of U.S. firms and a text-based measure of managerial and analyst attention to climate change issues during earnings calls, we document a negative association between firms{\textquoteright} climate change exposure and changes in U.S. mutual fund ownership, suggesting U.S. mutual funds{\textquoteright} cautious investment approach to climate change. We further provide causal evidence for this relation using the staggered adoptions of state-level climate change adaptation plans and renewable portfolio standards. Additional analyses show that our finding is driven by climate-related opportunities and regulatory risks, rather than physical risks. Changes in U.S. mutual fund ownership reflect concerns over firms{\textquoteright} transition risks and stock performance pressures. Extending the analysis to non-U.S. mutual funds, we find similar results among funds domiciled in countries with strong environmental norms.",

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AU - Xing, Lu

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N2 - Using a sample of U.S. firms and a text-based measure of managerial and analyst attention to climate change issues during earnings calls, we document a negative association between firms’ climate change exposure and changes in U.S. mutual fund ownership, suggesting U.S. mutual funds’ cautious investment approach to climate change. We further provide causal evidence for this relation using the staggered adoptions of state-level climate change adaptation plans and renewable portfolio standards. Additional analyses show that our finding is driven by climate-related opportunities and regulatory risks, rather than physical risks. Changes in U.S. mutual fund ownership reflect concerns over firms’ transition risks and stock performance pressures. Extending the analysis to non-U.S. mutual funds, we find similar results among funds domiciled in countries with strong environmental norms.

AB - Using a sample of U.S. firms and a text-based measure of managerial and analyst attention to climate change issues during earnings calls, we document a negative association between firms’ climate change exposure and changes in U.S. mutual fund ownership, suggesting U.S. mutual funds’ cautious investment approach to climate change. We further provide causal evidence for this relation using the staggered adoptions of state-level climate change adaptation plans and renewable portfolio standards. Additional analyses show that our finding is driven by climate-related opportunities and regulatory risks, rather than physical risks. Changes in U.S. mutual fund ownership reflect concerns over firms’ transition risks and stock performance pressures. Extending the analysis to non-U.S. mutual funds, we find similar results among funds domiciled in countries with strong environmental norms.

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KW - Climate risks

KW - Mutual fund ownership

KW - Transition risks

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DO - 10.1016/j.bar.2026.101846

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SN - 0890-8389

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ER -

Climate Change Exposure and Mutual Fund Ownership

Abstract

Data Availability Statement

Acknowledgements

Funding

UN SDGs

Keywords

ASJC Scopus subject areas

Access to Document

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