Significant regulatory resources have been spent developing global, voluntary climate and sustainability disclosure standards, such as the TCFD, TNRD, and ISSB’s Sustainability and Climate Disclosure standards, or domestically required disclosures, such as in the EU and in the U.S. Thus, it is important to evaluate whether this disclosure, particularly voluntary, qualitative disclosure, will have the power to shift the allocation of capital, will have a significant effect on the management of climate risk within firms, and ultimately will reduce climate change risk and biodiversity loss.

In this Article, several interrelated questions are discussed. First, what does the empirical evidence show about the effects of required greenhouse gas (GHG) disclosures on emissions? What mechanisms are engaged in producing the reductions in GHG emissions that are seen in some studies? Is there evidence that disclosure of climate data causes institutional investors to re-allocate capital, and that this re-allocation is a significant source of pressure on firms? What, then, can we conclude about the use of disclosure in efforts to address climate change?