Has climate change optimism improved or declined over time? The role of board independence

We analyze the evolution of climate change sentiment in firms over time and the role of independent directors using sentiment metrics developed by Sautner et al. (2023). These metrics, derived from advanced textual analysis of earnings calls, capture overall sentiment, positive sentiment, negative sentiment, and specific metrics for physical risk, regulatory risk, and new business opportunities. Our findings reveal a positive trend in sentiment, driven by increased optimism and reduced negativity. Regulatory risk sentiment shows rising optimism, while physical risk sentiment remains stable. Independent directors initially dampen optimism, but this diminishes over time, highlighting sustainability’s strategic value. These findings suggest that climate-related corporate communication is increasingly driven by long-term strategic and economic considerations rather than symbolic statements. The results demonstrate the role of governance in shaping how firms respond to sustainability challenges, with implications for corporate strategy, investor assessment of climate disclosures, and regulatory policy design.