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<p>In 2016, the California Department of Insurance introduced a public database of carbon-intensive holdings of certain California-licensed insurers. The database lowers the cost to external stakeholders of assessing insurers’ carbon investments by removing the need to analyze complex statutory filings. Using a difference-in-differences design, I find that, after the introduction of the database, affected insurers (i.e., those included in the database) reduce their carbon-intensive holdings by approximately 14% relative to unaffected insurers. The reduction is more pronounced for insurers with harder-to-process statutory filings, greater public visibility, or operations in states with more climate-conscious stakeholders. In terms of insurers’ divestment consequences, I find that affected portfolio firms reduce bond offerings and capital expenditures following the database’s introduction. Overall, my findings suggest that enhancing transparency on institutions’ carbon-intensive investments helps redirect capital away from the carbon economy.</p>

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Transparency and divestment: the impact of a public database about insurers’ carbon-intensive investments on their portfolio choices

  • 期刊论文

  • 发表日期：

    2025年12月18日

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  • Xiao Zhang

摘要

In 2016, the California Department of Insurance introduced a public database of carbon-intensive holdings of certain California-licensed insurers. The database lowers the cost to external stakeholders of assessing insurers’ carbon investments by removing the need to analyze complex statutory filings. Using a difference-in-differences design, I find that, after the introduction of the database, affected insurers (i.e., those included in the database) reduce their carbon-intensive holdings by approximately 14% relative to unaffected insurers. The reduction is more pronounced for insurers with harder-to-process statutory filings, greater public visibility, or operations in states with more climate-conscious stakeholders. In terms of insurers’ divestment consequences, I find that affected portfolio firms reduce bond offerings and capital expenditures following the database’s introduction. Overall, my findings suggest that enhancing transparency on institutions’ carbon-intensive investments helps redirect capital away from the carbon economy.