This paper reviews the empirical finance literature on the effects of realized physical climate hazards on equity markets. Synthesizing evidence from 47 studies, it shows that climate-related events have significant impacts on stock returns, volatility, correlations, and, to a lesser extent, liquidity. From an investor perspective, negative effects dominate, particularly for extreme heat, tropical cyclones, droughts, and wildfires, but positive abnormal returns arise in specific sectors and contexts. The review documents substantial heterogeneity across hazards, regions, and firm characteristics, as well as a pronounced bias toward United States data and acute events. Finally, the paper discusses how these results on realized climate-related events can inform and enhance forward-looking frameworks for managing climate risks.
