The Impact of Climate Risks on Corporate Debt Financing
European Financial Management, vol.32, no.3, pp.903-931, 2026 (SSCI, Scopus)
- Publication Type: Article / Article
- Volume: 32 Issue: 3
- Publication Date: 2026
- Doi Number: 10.1111/eufm.70035
- Journal Name: European Financial Management
- Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, ABI/INFORM, EconLit, vLex
- Page Numbers: pp.903-931
- Keywords: climate risks, corporate debt financing, just transition, machine learning, resilience, sustainable finance, text analysis
- Open Archive Collection: Article
- Azerbaijan State University of Economics (UNEC) Affiliated: Yes
Abstract
As global resource demands and climate pressures grow, companies face the dual challenge of sustainability and environmental responsibility. Using panel data from U.S. publicly listed firms (2014–2022) and a text-based proxy for climate risks, this study explores the impact of just transition climate risks on corporate debt financing. Results show climate risks increase debt financing, driven by optimized leverage and operational strategies, but also constrain financing through efficiency and liquidity pressures. Smaller firms benefit most, though supply chain stress can reduce economic value. This study provides actionable insights for strengthening resilience and competitiveness in a low-carbon economy.