Determinants and Consequences of Endorsement for the Task Force on Climate-Related Financial Disclosures : Evidence from Japanese Listed Firms

We examine the determinants for endorsing the TaskForce on Climate- Related Financial Disclosures (TCFD) and the impact of this support on corporate value. We find that firms with the following characteristics tend to support TCFD: large size; belonging to industries sensitive to the environment; high environmental performance; high ratios of outside directors; and low ratios of stable shareholders. We also find that the corporate value of TCFD-supporting firms is more likely to be higher than that of non-supporting firms. The evidence suggests that TCFD support is associated with firmsʼ needs and governance characteristics and results in an economically favorable outcome.