Climate change exposure and corporate culture: A text-based approach

Utilizing unique measures of climate change vulnerability and corporate culture generated through cutting-edge textual analysis, we explore the effects of firm-specific exposure to climate change on corporate culture. Based on a sample of over 46,000 U.S. observations from 2001 to 2018, our findings demonstrate that firms with greater exposure to climate change have a significantly stronger corporate culture. Companies recognize the value of a strong corporate culture in helping them navigate the unpredictable environment produced by climate change. Therefore, when more exposed to climate change, firms are more driven to promote a robust corporate culture. In particular, an increase in climate change exposure by one standard deviation strengthens corporate culture by 3.12%-37.70%.