A0446
Title: The impact of TCFD reporting: A new application of zero-shot analysis to climate-related financial disclosures
Authors: Alix Auzepy - Justus-Liebig-University Giessen (Germany)
Christoph Funk - Justus-Liebig-University Giessen (Germany)
Elena Toenjes - Justus-Liebig-University Giessen (Germany) [presenting]
Abstract: Climate-related disclosures in 3,335 reports are examined based on a sample of 188 banks that officially endorsed the recommendations of the Task Force for Climate-related Financial Disclosures (TCFD). In doing so, we introduce a new application for zero-shot text classification based on the BART model and an MNLI task. By developing a set of robust and fine-grained labels, we show that zero-shot analysis provides high accuracy in classifying companies' climate-related disclosures without further model training. Overall, our findings show that TCFD-supporting banks increase their level of disclosure after the launch of the TCFD recommendations and following their individual declaration of support. However, we also find significant variation in the extent of reporting by topic, suggesting that some recommendations have not yet been fully met. Our findings yield important conclusions for the design of climate-related disclosure frameworks.
