Climate Change and Business: Challenges and Innovations

Special Issue Information

Climate change is a pressing global challenge expected to impact businesses and finance across all sectors profoundly. While the long-term consequences of climate change remain uncertain, the potential for challenges and opportunities is undeniable. Physical climate risks, such as extreme weather events, rising sea levels, and changes in temperature and precipitation patterns, can disrupt supply chains, damage infrastructure, and increase production costs. Transitional climate risks arising from transitioning to a low-carbon economy include regulatory changes, carbon pricing, and shifting consumer preferences for sustainable products and services.

There is an active research debate regarding the economic and financial effects of climate change. This debate largely revolves around three main themes: the measurement of the business exposure to climate change, the identification of channels through which climate change affects businesses, and firm-, industry- and country-level factors that provide resilience to deal with the adverse effects of climate change. 

Climate change is a long-term phenomenon with both short-term and long-term consequences. Measuring the climate change exposure of businesses is a challenge. Recent research has made some progress with country or firm-level proxies. For instance, Huang et al. (2018) and Shear et al. (2023) have used the country-level global climate risk index compiled by Germnawatch and the climate vulnerability index created by ND-GAIN, respectively, to proxy cross-country climate exposure of businesses. In another significant development, Sautner et al. (2023) created data on climate change exposure of businesses at the firm level with textual analysis of earnings calls reports of companies. In this regard, using these existing climate change exposure data to examine business practices is important. Further, creating new datasets of climate change exposure is also an emerging research area. 

Climate change creates both opportunities and challenges for businesses. While some studies have investigated the effects of climate change on business performance (Cevik & Miryugin, 2023; Huang et al., 2018; Ozkan et al., 2023; Sautner et al., 2023), assets pricing including real estate, equities, and fixed income securities  (Acharya et al., 2022; Bernstein et al., 2019; Giglio et al., 2021), international investments  (Li & Gallagher, 2022; Shear et al., 2023), and mergers and acquisitions (Lodh et al. 2024), there is still a lack of comprehensive understating on how climate change risks and opportunities interact with business practices.

Finally, certain firm-, industry- and country-level factors may help businesses to navigate the climate risks more effectively. For instance, recent studies have examined the role played by firm corporate governance  (Orazalin et al., 2024) and CSR performance  (Ozkan et al., 2023). In this regard, other firm-level factors such as innovation performance, the levels of capitalization and liquidity, and technology adoption may also be important. Likewise, country-level policies and institutions may help in dealing with the effects of climate change (Shear et al. (2023)). 

Special Issue Guest Editors

Badar Nadeem Ashraf
London South Bank University, United Kingdom
Email: [email protected]  

Yinjie (Victor) Shen
Cleveland State University, USA
Email: [email protected]  
 

Manuscript Submission Information

This special issue aims to enhance our understanding of climate change's economic and financial effects and welcomes contributions that further extend this debate. The topics may include, but are not limited to, the following:

    Measuring climate exposure of firms with innovative techniques
    Business climate exposure and performance
    Business climate risk governance mechanisms
    Climate risk and equity pricing
    Climate risk and bond pricing
    Climate risk and commodities pricing
    Climate disclosures in business reporting and their effects on investors' perceptions
    Government climate policies and their effects
    Climate policy uncertainty and business 
    Manuscript Submission Information

All submissions will undergo the same strict double-blind peer-review process applied to the journal. Accepted papers will be published continuously in the journal (as soon as accepted). The special issue is expected to be published in the first quarter of 2026.

To submit a manuscript, please register and submit your paper online at https://mc.manuscriptcentral.com/cfri. When making your submission, please choose the Special Issue entitled “Climate Change and Business: Challenges and Innovations”. A guide for authors and other relevant information for the submission of manuscripts is available on the Author Guidelines page. Manuscripts can be submitted until the deadline. Submitted manuscripts should not have been published previously nor be under consideration for publication elsewhere. The submission portal opens on May 1st, 2024. The deadline for submissions is March 31st, 2025.

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The China Finance Review International is a flagship academic journal broadly covering the Chinese and international financial markets. The journal is founded by Antai College of Economics and Management at Shanghai Jiao Tong University, one of the top universities in Asia. CFRI has been accepted by the Web of Science and indexed in Scopus since 2016. Currently, the journal has an impact factor of 8.2 and it has a real-time CiteScore of 12.4. We hope to have your support for the journal and wish we will have your work published in the journal. 

If you would like to discuss your paper before submission please contact the guest editors at their email addresses. For advice on the submission process, please contact the CFRI Editorial Office (Shanghai Jiao Tong University) at the following email address: [email protected].

References

Acharya, V., Johnson, T., Sundaresan, S. M., & Tomunen, T. (2022). Is Physical Climate Risk Priced? Evidence from Regional Variation in Exposure to Heat Stress.
Bernstein, A., Gustafson, M. T., & Lewis, R. (2019). Disaster on the horizon: The price effect of sea level rise. Journal of Financial Economics, 134(2), 253-272. 10.1016/j.jfineco.2019.03.013
Cevik, S., & Miryugin, F. (2023). Rogue Waves: Climate change and firm performance. Comparative Economic Studies, 65(1), 29-59. 
Giglio, S., Maggiori, M., Rao, K., Stroebel, J., & Weber, A. (2021). Climate Change and Long-Run Discount Rates: Evidence from Real Estate. The Review of Financial Studies, 34(8), 3527-3571. 10.1093/rfs/hhab032
Huang, H. H., Kerstein, J., & Wang, C. (2018). The impact of climate risk on firm performance and financing choices: An international comparison. Journal of International Business Studies, 49, 633-656. 
Li, X., & Gallagher, K. P. (2022). Assessing the climate change exposure of foreign direct investment. Nature Communications, 13(1), 1-9. 
Orazalin, N. S., Ntim, C. G., & Malagila, J. K. (2024). Board sustainability committees, climate change initiatives, carbon performance, and market value. British Journal of Management, 35(1), 295-320. 
Ozkan, A., Temiz, H., & Yildiz, Y. (2023). Climate Risk, Corporate Social Responsibility, and Firm Performance. British Journal of Management, 34(4), 1791-1810. 10.1111/1467-8551.12665
Sautner, Z., van Lent, L., Vilkov, G., & Zhang, R. (2023). Pricing Climate Change Exposure. Management Science, 10.1287/mnsc.2023.4686
Shear, F., Ashraf, B. N., & Butt, S. (2023). Sensing the heat: Climate change vulnerability and foreign direct investment inflows. Research in International Business and Finance, 66, 102005. 10.1016/j.ribaf.2023.102005