Workshop’s Topic: This paper examines the labor-related costs of climate disclosure mandates and whether labor market constraints increase these costs and decrease the climate reporting activities driven by these mandates. I first classify a sample of climate reporting specialists (CRS) to measure firms’ hiring practices for job positions related to climate reporting. Using the European Union (EU)’s Non-Financial Reporting Directive (NFRD) as a setting, I find a significant increase in the acquisition of CRS in EU firms after the passage of the NFRD, compared to matched US firms. More importantly, EU firms pay a persistent wage premium to CRS that cannot be explained by position, firm, and individual characteristics and fill CRS positions with less qualified individuals, indicating that the increased demand for CRS leads to constraints in the labor market for CRS. These effects are more pronounced in positions that are non-entry level and in countries with fewer climate-related education programs. Lastly, I show that labor market constraints decrease firms’ climate reporting activities, undermining the effectiveness of the NFRD. Overall, this study quantifies the labor-related costs of climate disclosure mandates and highlights the labor-related challenges of implementing these mandates.

Time and Location: 15:00-17:00 PM (GMT+8), Room A423 (School of Management)

Language: Bilingual (Chinese and English)