Advertisement

Climatic Change

, Volume 143, Issue 1–2, pp 243–260 | Cite as

Stranded research? Leading finance journals are silent on climate change

  • Ivan Diaz-RaineyEmail author
  • Becky Robertson
  • Charlie Wilson
Essay

Abstract

Finance research has shaped the modern financial system, influencing investors and market participants directly through research findings and indirectly through teaching and training programmes. Climate change presents major risks to the global financial system as well as new opportunities for investors. Is climate finance an important topic in finance research? We systematically analyse the content of 20,725 articles published in the leading 21 finance journals between January 1998 and June 2015. We find that only 12 articles (0.06%) are related in some way to climate finance. The three elite finance journals (Journal of Finance, Journal of Financial Economics and Review of Financial Studies) did not publish a single article related to climate finance over the 17.5-year period. We repeat our analysis across a sample of 29 elite business journals spanning accounting, economics, management, marketing and operations research, as well as finance. We find a similar dearth of published climate finance research. We consider four possible explanations for this failure of top finance and business journals to engage with climate finance as a research topic. These include methodological constraints and editorial policies. We conclude by arguing why it is critical for climate-related research to be given greater attention and prominence in finance journals.

Notes

Acknowledgements

IDR acknowledges University of Otago research leave funding which made this research possible. CW and BR acknowledge the support of the Tyndall Centre for Climate Change Research. Useful suggestions were received during a related presentation by IDR at the Smith School of Enterprise and the Environment, University of Oxford (June 2016).

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

References

  1. ABS (2015) Academic Journal Guide 2015. Association of Business Schools, LondonGoogle Scholar
  2. Alexander K (2014) Stability and sustainability in banking reform: are environmental risks missing in Basel III?. University of Cambridge Institute for Sustainability Leadership (CISL), CambridgeGoogle Scholar
  3. Andersson M, Bolton P, Samama F (2016) Hedging climate risk. Financ Anal J 72(3):13–32CrossRefGoogle Scholar
  4. Ansar A, Caldecott B, Tilbury J (2013) Stranded assets and the fossil fuel divestment campaign: what does divestment mean for the valuation of fossil fuel assets. Stranded Assets Programme, SSEE, University of Oxford, 1–81.Google Scholar
  5. Batten, S., Sowerbutts, R. & Tanaka, M. (2016). Let’s talk about the weather: the impact of climate change on central banks. Bank of England Staff Working Paper No.603.Google Scholar
  6. Bhattacharya U, Dong A, Li FW, Ma F, Wang B (2016) What’s hot in finance (2011–2015)?. Presentation. Available at SSRN: https://ssrn.com/abstract=2741503 or  10.2139/ssrn.2741503
  7. Boussalis C, Coan TG (2016) Text-mining the signals of climate change doubt. Glob Environ Chang 36:89–100CrossRefGoogle Scholar
  8. Carbon Tracker Initiative (2013) Unburnable Carbon 2013: wasted capital and stranded assets. Carbon Tracker and Grantham Research Institute.Google Scholar
  9. Carbon Tracker Initiative (2015) The $2 trillion stranded assets danger zone: how fossil fuel firms risk destroying investor returns. Carbon Tracker Initiative.Google Scholar
  10. Carney M (2015) Breaking the tragedy of the horizon—climate change and financial stability. Speech given at Lloyd’s of London (29 September). Available from http://www.bankofengland.co.uk/publications/Pages/speeches/2015/844.aspx
  11. Currie RR, Pandher GS (2011) Finance journal rankings and tiers: an active scholar assessment methodology. J Bank Financ 35(1):7–20CrossRefGoogle Scholar
  12. D’Agostino AL, Sovacool BK, Trott K, Ramos CR, Saleem S, Ong Y (2011) What’s the state of energy studies research?: a content analysis of three leading journals from 1999 to 2008. Energy 36(1):508–519CrossRefGoogle Scholar
  13. de Jong M, Nguyen A (2016) Weathered for climate risk: a bond investment proposition. Financ Anal J 72(3):34–39CrossRefGoogle Scholar
  14. Diaz-Rainey I, Ibikunle G, Mention AL (2015) The technological transformation of capital markets. Technol Forecast Soc Chang 99:277–284CrossRefGoogle Scholar
  15. Dietz S, Bowen A, Dixon C, Gradwell P (2016) Climate value at risk’ of global financial assets. Nat Clim Chang 6:676–679CrossRefGoogle Scholar
  16. Fishe RP (1998) What are the research standards for full professor of finance? J Financ 53(3):1053–1079CrossRefGoogle Scholar
  17. Focardi SM, Fabozzi FJ (2012) What’s wrong with today’s economics? The current crisis calls for an approach to economics rooted more on data than on rationality. J Portf Manag 38(3):104–119CrossRefGoogle Scholar
  18. FSB (2016) Phase 1 report of the task force on climate-related financial disclosures. Board, Financial StabilityGoogle Scholar
  19. Goodall AH (2008) Why have the leading journals in management (and other social sciences) failed to respond to climate change? J Manag Inq 17(4):408–420CrossRefGoogle Scholar
  20. Griffin PA, Jaffe AM, Lont DH, Dominguez-Faus R (2015) Science and the stock market: investors’ recognition of unburnable carbon. Energy Econ 52:1–12CrossRefGoogle Scholar
  21. Karlin B, Davis N, Sanguinetti A, Gamble K, Kirkby D, Stokols D (2014) Dimensions of conservation: exploring differences among energy behaviors. Environ Behav 46(4):423–452CrossRefGoogle Scholar
  22. Keasey K, Hudson R (2007) Finance theory: a house without windows. Crit Perspect Account 18(8):932–951CrossRefGoogle Scholar
  23. Leaton J (2011) Unburnable carbon—are the world’s financial markets carrying a carbon bubble. Carbon Tracker Initiative.Google Scholar
  24. McCright AM, Dunlap RE (2011) The politicization of climate change and polarization in the American public’s views of global warming, 2001–2010. Sociol Q 52:155–194CrossRefGoogle Scholar
  25. Muñoz F, Vargas M, Marco I (2014) Environmental mutual funds: financial performance and managerial abilities. J Bus Ethics 124(4):551–569CrossRefGoogle Scholar
  26. Painter J, Ashe T (2012) Cross-national comparison of the presence of climate scepticism in the print media in six countries, 2007–10. Environ Res Lett 7(4):044005CrossRefGoogle Scholar
  27. Patenaude G (2011) Climate change diffusion: while the world tips, business schools lag. Glob Environ Chang 21:259–271CrossRefGoogle Scholar
  28. Pauw WP, Klein RJ, Vellinga P, Biermann F (2016) Private finance for adaptation: do private realities meet public ambitions? Clim Chang 134(4):489–503CrossRefGoogle Scholar
  29. Tulloch DJ, Diaz-Rainey I, Premachandra IM (2017) The impact of liberalization and environmental policy on the financial returns of European energy utilities. Energy J 38:77–106Google Scholar
  30. Van Renssen S (2014) Investors take charge of climate policy. Nat Clim Chang 4(4):241–242CrossRefGoogle Scholar
  31. Wilson C, Hargreaves T, Hauxwell-Baldwin R (2015) Smart homes and their users: a systematic analysis and key challenges. Pers Ubiquit Comput 19(2):463–476CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2017

Authors and Affiliations

  • Ivan Diaz-Rainey
    • 1
    Email author
  • Becky Robertson
    • 2
  • Charlie Wilson
    • 2
  1. 1.Department of Accountancy and Finance & the Otago Energy Research Centre (OERC)University of OtagoDunedinNew Zealand
  2. 2.Tyndall Centre for Climate Change Research, School of Environmental SciencesUniversity of East AngliaNorwichUK

Personalised recommendations