Climate Risks and Debt Structure

Bill B.  Francis; Iftekhar  Hasan; Chunxia Jiang; Zenu  Sharma; Yun Zhu

doi:10.1016/j.bar.2025.101614

Climate Risks and Debt Structure

Bill B. Francis
, Iftekhar Hasan
, Chunxia Jiang
, Zenu Sharma
, Yun Zhu^* (Corresponding Author)

^*Corresponding author for this work

Accountancy & Finance, Finance

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

5 Downloads (Pure)

Abstract

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.

Original language	English
Article number	101614
Number of pages	20
Journal	British Accounting Review
Volume	57
Issue number	5
Early online date	5 Mar 2025
DOIs	https://doi.org/10.1016/j.bar.2025.101614
Publication status	Published - Sept 2025

Data Availability Statement

Data will be made available on request.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 12 Responsible Consumption and Production
SDG 13 Climate Action

Keywords

corporate debt
debt structure
climate change
corporate social responsibility

Access to Document

10.1016/j.bar.2025.101614Licence: Unspecified

Francis_etal_BFR_Climate_Risk_and_AAM
This manuscript has been made open access under a Creative Commons Attribution (CC BY) licence under the terms of the University of Aberdeen Research Publications Policy. https://creativecommons.org/licenses/by/4.0/
Accepted author manuscript, 706 KBLicence: CC BY

Cite this

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abstract = "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.",

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AB - 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.

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KW - debt structure

KW - climate change

KW - corporate social responsibility

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Climate Risks and Debt Structure

Abstract

Data Availability Statement

UN SDGs

Keywords

Access to Document

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