(2026). What Firms Actually Lose (and Gain) from Extreme Weather Event Impacts.
Climate change is increasing the severity of extreme weather events, posing substantial risks for firms, investors, and the economy. Although quantifying such risks has become increasingly important, existing approaches for estimating the impacts from extreme weather events face major limitations. Here, we propose a novel approach to identify and categorize firm-level impacts of extreme weather events from public corporate filings. Using large language models, we analyze 1.7 million filings from all publicly listed US firms (2005-2024), map identified impacts to 286 specific extreme weather events, and classify them by impact channels (direct asset vs. indirect economic flows) and directionalities (positive vs. negative). We identify 13,277 firm-event impacts and estimate that negative impacts caused a cumulative average abnormal stock return of -2.36% per event. The total firm value losses accumulate to $2.709 trillion USD (inflation-adjusted) between 2005 and 2024, which are primarily driven by direct asset impacts. Furthermore, we estimate that aggregated gains of firms that report positive impacts from extreme weather events accumulate to $327 billion USD. The highest losses are caused by severe storms and tropical cyclones and experienced by firms in manufacturing and finance. For some sectors, such as retail and construction, we find that returns recover quickly and even turn positive, potentially due to a rebound in demand after the events. Our approach allows for a systematic, firm-level quantification of physical climate impacts, enabling informed risk assessments and adaptation strategies with high granularity.
