Climate risks and debt structure

doi:10.1016/j.bar.2025.101614

Climate risks and debt structure

2025-03-05

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DOI：10.1016/j.bar.2025.101614

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This paper examines the impact of climate risks on the debt structure of a sample of U.S. firms from 2002 through 2020. Climate risks—mainly physical, regulatory, and transition risks—are associated with a concentrated debt structure for the affected firms. However, when climate risks propagate through the channels of expected bankruptcy costs and sustainability, they are associated with a more diversified debt structure. Additionally, climate risks asymmetrically impact the relationship between access to finance and debt structure. Results from a quasi-natural experiment reaffirm the impact of climate risks on debt structure.

Climate risks and debt structure

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