Climate Risk Accounting and Its Impact on Firm Value

This paper develops a comprehensive conceptual analysis of climate risk accounting and its implications for firm value in modern financial markets. It distinguishes between physical and transition climate risks and examines how both dimensions are incorporated into accounting and disclosure systems. The study synthesizes key transmission channels, including cost of capital, cash flow uncertainty, investor perception, credit constraints, and operational exposure, through which climate risk affects valuation outcomes. It also critically evaluates emerging reporting frameworks such as TCFD recommendations and IFRS S۲ standards, alongside the limitations of ESG disclosure systems. The analysis highlights persistent challenges related to measurement inconsistency, data reliability, greenwashing risks, and short-termism in financial markets. The paper argues that climate risk is increasingly priced into equity and debt markets, reshaping capital allocation and investment behavior. Overall, it positions climate risk accounting as a critical evolution in financial reporting that enhances transparency and supports sustainable decision-making. The study provides an integrated framework linking climate disclosure practices to firm valuation and market efficiency.

کلیدواژه ها:

Climate risk accounting ، Firm value ، Climate-related disclosure ، ESG reporting