Using Natural Language Processing to Analyze Financial Climate Disclosures (Ideas Track) Spotlight

Sasha Luccioni (Mila); Hector Palacios (Element AI)

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Climate Finance & Economics

Abstract

According to U.S. financial legislation, companies traded on the stock market are obliged to regularly disclose risks and uncertainties that are likely to affect their operations or financial position. Since 2010, these disclosures must also include climate-related risk projections. These disclosures therefore present a large quantity of textual information on which we can apply NLP techniques in order to pinpoint the companies that divulge their climate risks and those that do not, the types of vulnerabilities that are disclosed, and to follow the evolution of these risks over time.

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