Talk by Tobias Schimanski (University of Zurich) und Malte Toetzke (Transformation Finance Lab)
Climate change isn’t just a distant concern. Rising extreme weather events are creating real and growing financial risks for companies, investors, and economies. Yet assessing these impacts systematically remains a major challenge.
In their latest research, Tobias Schimanski and Malte Toetzke introduce a novel approach to detect and classify the firm-level consequences of extreme weather using public corporate disclosures. Leveraging large language models, they analyze 1.7 million filings from all publicly listed US firms (2005–2024), match references to 286 distinct weather events, and categorize impacts by transmission channels (direct asset vs. indirect economic flows) and directionalities (positive vs. negative).
The findings are substantial:
- 13,277 identified firm-event impacts
- –1.59% average abnormal stock return per event
- USD 2.538 trillion in cumulative losses from negatively impacted firms (inflation-adjusted)
- USD 324 billion in aggregated gains for firms that benefit from extreme events
- Severe storms and tropical cyclones drive the highest losses
- Manufacturing and finance are the most affected sectors
- Some industries, such as retail and construction, show rapid rebounds and even positive returns after events, likely due to increased demand
This approach offers a powerful basis for future risk assessments, financial impact estimates, and targeted action for firms, investors, and policymakers preparing for or responding to climate-related shocks.
The TUM Think Tank invites professionals, students, and anyone interested in climate-related economic risks to join this talk.
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