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Abstract
We show that climate disasters distract investors. During events such as hurricanes, floods, and wildfires, investors allocate their attention to these disasters and away from stocks. Consequently, firm insiders trade more when other investors are distracted by climate disasters. Insiders appear to be motivated by the opportunity to make increased profits. Insider concerns about litigation risk or fund requirements for personal reasons do not explain the climate disaster–induced increase in transactions. Our paper documents a new way through which climate impacts investor behavior and financial markets.