We study government disclosure of the spatial distribution of climate risk. A regulator decides whether to reveal which region is exposed to disaster risk. Households can insure against the disaster or relocate at a cost. Disclosure induces migration out of the risky region, which reduces aggregate risk but impairs risk sharing by revealing who is exposed. Migration also lowers insurance prices by increasing the supply...

We build a model analyzing optimal environmental regulation in the presence of socially responsible investors. Investors care about sustainability of their portfolios but cannot fully resolve the pollution externality. Regulations, such as pollution tax and subsidies to clean firms, reduce dirty firms’ size but also reshape firms’ shareholder compositions. Under the regulations, dirty firms’ shareholders become on average less averse to holding polluting shares and...

We study how green disclosure shapes portfolios and green investment. Disclosure polarizes shareholders and greenness outcomes: green investors concentrate in green firms and push them to become greener, while brown firms are held by less-green investors and reduce greenness. Because brown firms typically have cheaper opportunities to increase greenness, this sorting reduces aggregate greenness and imposes an externality cost despite improving allocative efficiency. Disclosure alone...