Physical climate risk: Stock price reactions to the historically most extreme European and United States heat waves since 1979.

ABSTRACT: Climate change has heightened the need to understand physical climate risks, such as the increasing frequency and severity of heat waves, for informed financial decision-making. This study investigates the financial implications of extreme heat waves on stock returns in Europe and the United States. Accordingly, the study combines meteorological and stock market data by integrating methodologies from both climate science and finance. The authors use meteorological data to ascertain the five strongest heat waves since 1979 in Europe and the United States, respectively, and event study analyses to capture their effects on stock prices across firms with varying levels of environmental performance. The findings reveal a marked increase in the frequency of heat waves in the 21st century, reflec

SUBMITTER: Schuster M 

PROVIDER: S-EPMC11760027 | biostudies-literature | 2025

REPOSITORIES: biostudies-literature