Professional financial statement users’ perceived value of carbon accounting disclosures and decision context
ISSN: 2049-372X
Article publication date: 7 April 2022
Issue publication date: 10 July 2023
Abstract
Purpose
This study aims to investigate how professional financial statement users use carbon accounting information in their decisions and whether this use is sensitive to changing the decision context from an investment to a donation.
Design/methodology/approach
Using a sample of 173 US professional financial statement users, the authors conduct an experiment that manipulates an investment or donation choice to evaluate how differing levels of carbon sequestration affect decision-making across contexts.
Findings
Carbon sequestration information affects users’ donation decisions but does not affect investment decisions. Variation in the reliability of the information and whether the information is linked to strategy do not affect users’ decision-making.
Research limitations/implications
This study is performed by an experiment and informs our understanding of the relevance to users of carbon sequestration disclosure. Results indicate that carbon sequestration disclosure has value for donation but not investment decisions. The authors interpret this as evidence of some value of this type of disclosure in professional financial statement users’ decision-making but not for a financially focused evaluation.
Originality/value
This paper provides unique insights into the effect of reporting carbon sequestration on decision-making. There has been significant research on the broader topic of corporate sustainability, and capital markets research indicates that the market values increased sustainability disclosure. This study extends the research by examining a specific component of carbon disclosure that is not currently widely reported and by the use of information for different types of evaluations. The results find evidence that the value of this type of carbon disclosure does not stem from a purely financial perspective but instead, from other nonpecuniary factors.
Keywords
Acknowledgements
The authors are grateful to the Australian Research Council (LP130100081), the Royal Botanic Gardens and National Herbarium of Victoria, and Chartered Accountants, Australia and New Zealand for financial support for the project from which this study was developed. Thanks also to seminar participants at The University of Adelaide for useful comments on the paper. Finally, thanks to Abdifatah Ahmed Haji for his excellent research assistance.
Citation
Coram, P., Potter, B. and Soderstrom, N. (2023), "Professional financial statement users’ perceived value of carbon accounting disclosures and decision context", Meditari Accountancy Research, Vol. 31 No. 4, pp. 887-911. https://doi.org/10.1108/MEDAR-02-2021-1193
Publisher
:Emerald Publishing Limited
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