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Impact of corporate climate change disclosure on firm performance: empirical evidence from an emerging economy

Biswajit Ghose (Department of Commerce, Tezpur University, Tezpur, India)
Nivaj Gogoi (Department of Commerce, Tezpur University, Tezpur, India)
Premendra Kumar Singh (School of Online Education, Bharati Vidyapeeth (Deemed to be University), Pune, India)
Kiran Gope (Department of Management, Mizoram University, Aizawl, India)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 28 November 2024

Issue publication date: 6 January 2025

428

Abstract

Purpose

This study aims to investigate the impact of corporate climate change disclosure (CCD) on the financial performance of Indian firms.

Design/methodology/approach

The study is grounded in the principles of signalling theory, legitimacy theory and the cost-benefit analysis approach. The sample for the study includes 77 Indian firms from 2018–2019 to 2021–2022. Required data are collected from published annual reports, sustainability reports and the Ace Equity Database. The explanatory variable CCD is measured using content analysis based on the Task Force on Climate-related Financial Disclosures (TCFD) framework. The panel fixed-effects or random-effects models have been considered for hypotheses testing.

Findings

The disclosure level of CCD and its different components is found to be moderate with an average score of 0.364 among top Indian firms. Regression results reveal a significant positive association between CCD on firms’ market-based performance, suggesting its long-term benefits. Besides, additional analysis indicates the differential impact of CCD on financial performance based on firms’ CEO duality status, industry affiliation and pre-COVID and post-COVID period, thus establishing their moderating role in the observed relationship.

Practical implications

The study highlights the necessity of enhancing climate-related disclosure by Indian firms and strategically leveraging the same to boost their financial performance.

Originality/value

Few studies have examined the implications of CCD (based on the TCFD framework) on firm performance. Moreover, exploring the moderating role of CEO duality, industry type and COVID-19 in the CCD and firm performance relationship is a novel empirical contribution.

Keywords

Citation

Ghose, B., Gogoi, N., Singh, P.K. and Gope, K. (2025), "Impact of corporate climate change disclosure on firm performance: empirical evidence from an emerging economy", Sustainability Accounting, Management and Policy Journal, Vol. 16 No. 2, pp. 389-414. https://doi.org/10.1108/SAMPJ-09-2023-0714

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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