The application of artificial intelligence in corporate climate risk: Information disclosure, information advantage, and information prediction

This paper constructs a corporate climate risk information index using machine learning-based textual analysis and examines the impact of AI on climate risk disclosure, utilizing data from Chinese A-share listed firms between 2014 and 2022. The results indicate that AI significantly enhances corporate climate risk information disclosure, with this conclusion remaining robust across a series of sensitivity checks. The underlying mechanisms include the reduction of agency costs and the alleviation of financing constraints. Heterogeneity analysis reveals that the positive effect is more pronounced in firms with high ESG performance and those held by “pan-ESG” funds. Further analysis reveals that AI can enhance firms' advantages in accessing industry-level climate risk information and demonstrates strong predictive power in corporate climate risk. This study underscores the positive role of AI in climate risk disclosure and contributes to the literature on sustainable development theory.