Companies that perceive high climate change risks are significantly less likely to steal wages from their employees.
One might expect firms facing environmental pressure to cut labor costs, but climate risk actually acts as a disciplining force. Firms treat workers better because they realize maintaining a skilled and loyal workforce is essential for surviving future climate-driven economic shocks.
Working Amid Climate Uncertainties: The Disciplining Effect of Climate Risk on Employee Treatment
SSRN · 6504054
In examining how firm-level climate risk influences wage theft, a major form of employee mistreatment, we document that wage theft is less prevalent in firms with high climate risk perception. To establish causality, we employ difference-in-differences analysis around the adoption of the Paris Agreement and instrumental variable estimation. The negative relation between climate risk and wage theft is more pronounced in labor-intensive firms and those heavily reliant on skilled labor, suggesting