Does climate news sway investors away from large financiers of fossil fuel projects?

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Despite rapid growth in climate news coverage, some banks are increasing financing towards greenhouse gas emitters with investors whose decisions intensify climate challenges. This study aims to establish the impact of climate news on investment decisions involving banks’ intensified fossil fuel financing and recommend remedies. Descriptive, linear regression analyses and the two-sample t-test are applied. The list of bank stems from the Consumer News and Business Channel website. Share prices, traded shares and market capitalizations are obtained from Macrotrends and Companies’ market cap websites for computing demand and holding periods. Results reveal more demand for riskier banks after European symposiums in contrast to Asia’s reduction. It is established that no significant linear relationships exist between demand and holding periods with t < T and p-value > 0.05. The null hypothesis of no linear relationship is not rejected. There is more price risk in Europe than in Asia with average volatilies of 0.439871 and 0.067472, respectively, at p-value 0.002117 < 0.05 based on the two-sample t-test. The null hypothesis of no difference in volatility means is rejected. The higher volality risk corresponds to higher demand for riskier bank shares in Europe. Climate news persuades Asian investors to reduce the demand for the banks’ shares. Conversely, European investors demonstrate behaviors incompatible with climate risk mitigation, particularly in periods after symposiums. A Global climate risk blacklisting initiative and a publicised Global climate risk index should accompany downgrades aimed at fossil fuel project financiers. Coverage of these measures at conferences may influence more investors to make correct decisions.

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    • Figure 1. Europe before COPs
    • Figure 2. Europe after COPs
    • Figure 3. Asia before COPs
    • Figure 4. Asia after COPs
    • Table 1. Linear relationship and inferential statistics
    • Table 2. Two-sample t-test
    • Conceptualization
      Chekani Nkwaira
    • Data curation
      Chekani Nkwaira
    • Formal Analysis
      Chekani Nkwaira
    • Investigation
      Chekani Nkwaira
    • Methodology
      Chekani Nkwaira
    • Writing – original draft
      Chekani Nkwaira
    • Project administration
      Huibrecht Margaretha van der Poll
    • Supervision
      Huibrecht Margaretha van der Poll
    • Validation
      Huibrecht Margaretha van der Poll
    • Visualization
      Huibrecht Margaretha van der Poll
    • Writing – review & editing
      Huibrecht Margaretha van der Poll