We study the comprehension, mapping, and reporting of climate-related risks among firms listed on the NasdaqOMX stock exchange in Stockholm. Our study contains two parts: i) a study on the firms’ external communication through their annual reports, sustainability reports and webpages, and ii) a follow-up survey addressed to each firm’s management team. We find that firms are likely to engage in some form of mapping and reporting of climate-related risks. However, their comprehension of the nature of these risks, underlying problems, and what a climate transition implies varies across firms and industries. There are also substantial variations in the method employed to map and report climate- related risks. Our results further suggest that firms use the Task Force on Climate-related Financial Disclosures’ recommendations (TCFD) on how to map and report climate risks as a learning tool to improve their climate-risk management. However, as a voluntary initiative it is insufficient to generate substantial change. Consequently, policymakers should focus on improving firms’ comprehension of what constitutes a climate-risk, how to map such risks and how to report them. The mapping and reporting of climate-related risk may otherwise prove an inefficient tool to redirect and accelerate investments promoting a low-carbon and climate-resilient economy
