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1 – 10 of over 2000
Article
Publication date: 12 March 2024

Ankita Bedi and Balwinder Singh

This study aims to determine the influence of corporate governance characteristics on carbon emission disclosure in an emerging economy.

Abstract

Purpose

This study aims to determine the influence of corporate governance characteristics on carbon emission disclosure in an emerging economy.

Design/methodology/approach

The study is based on S&P BSE 500 Indian firms for the period of 6 years from 2016–2017 to 2021–2022. The panel data regression models are used to gauge the association between corporate governance and carbon emission disclosure.

Findings

The empirical findings of the study support the positive and significant association between board activity intensity, environment committee and carbon emission disclosure. This evinced that the board activity intensity and presence of the environment committee have a critical role in carbon emission disclosure. On the contrary, findings reveal a significant and negative relationship between board size and carbon emission disclosure.

Practical implications

The present study provides treasured insights to regulators, policymakers, investors and corporate managers, as the study corroborates that various corporate governance characteristics exert significant influence on carbon emission disclosure.

Originality/value

The current research work provides novel insights into corporate governance and climate change literature that good corporate governance significantly boosts the carbon emission disclosure of firms. Previous studies examining the impact of corporate governance on carbon emission disclosure ignored emerging economies. Thus, the current work explores the role of governance mechanisms on carbon emission disclosure in an emerging context. Further, to the best of the author’s knowledge, the current study is the first of its kind to investigate the role of corporate governance on carbon emission disclosure in the Indian context.

Details

International Journal of Law and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 8 May 2023

Md Abubakar Siddique, Khaled Aljifri, Shahadut Hossain and Tonmoy Choudhury

In this study, the authors examine the relationships between market-based regulations and corporate carbon disclosure and carbon performance. The authors also investigate whether…

Abstract

Purpose

In this study, the authors examine the relationships between market-based regulations and corporate carbon disclosure and carbon performance. The authors also investigate whether these relationships vary across emission-intensive and non-emission intensive industries.

Design/methodology/approach

The study sample consists of the world's 500 largest companies across most major industries over a recent five-year period. Country-specific random effect multiple regression analysis is used to test empirical models that predict relationships between market-based regulations and carbon disclosure and carbon performance.

Findings

Results indicate that market-based regulations significantly and positively affect corporate carbon performance. However, market-based regulations do not significantly affect corporate carbon disclosure. This study also finds that the association between regulatory pressures and carbon disclosure and carbon performance varies across emission-intensive and non-emission-intensive industries.

Research limitations/implications

The findings of this study have key implications for policymakers, practitioners and future researchers in terms of understanding the factors that drive businesses to increase their carbon performance and disclosure. The study sample consists of only large firms, and future researchers can undertake similar studies with small and medium-sized firms.

Practical implications

The results of this study are expected to help business managers to identify the benefits of adopting market-based regulations. Regulators can use this study’s results to evaluate if market-based regulations effectively improve corporate carbon performance and disclosure. Furthermore, stakeholders may use this study to evaluate and improve their businesses' reporting of carbon disclosure and performance.

Originality/value

In contrast to current literature that has used command and control regulations as a proxy for regulation, this study uses market-based regulations as a proxy for climate change regulations. In addition, this study uses a more comprehensive measure of carbon disclosure and carbon performance compared to the previous studies. It also uses global multi-sector data from carbon disclosure project (CDP) in contrast to most current studies that use national data from annual reports of sample firms of specific sectors.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 11 February 2014

Chika Saka and Tomoki Oshika

The main purpose of this study is to examine the impact of corporate carbon emissions and disclosure on corporate value, especially regarding whether disclosure helps to reduce…

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Abstract

Purpose

The main purpose of this study is to examine the impact of corporate carbon emissions and disclosure on corporate value, especially regarding whether disclosure helps to reduce uncertainty in valuation as predicted by carbon emissions using a unique data set on Japanese companies.

Design/methodology/approach

Empirical analysis of the relations between corporate carbon emissions using compulsory filing data to Japanese Government covering more than 1,000 firms, corporate carbon management disclosure (CDP disclosure), and the market value of equity.

Findings

The authors find that corporate carbon emissions have a negative relation with the market value of equity, the disclosure of carbon management has a positive relation with the market value of equity, and the positive relation between the disclosure of carbon management and the market value of equity is stronger with a larger volume of carbon emissions.

Practical implications

The results may be important when considering the inclusion of carbon disclosure as a component of nonfinancial disclosure. In addition, the findings encourage Japanese companies to reduce carbon emissions and to disclose their carbon management activities.

Originality/value

The authors provide the first empirical evidence of an interactive effect between the volume of carbon emissions and carbon management disclosure on the market value of equity. And, the results concerning the relation between environmental performance, disclosure, and market value are readily generalizable, especially as all companies emit carbon, either directly or indirectly. In addition, the results are arguably free of problems with sampling bias and endogeneity as the authors employ data obtained from the compulsory filing of carbon emissions information.

Details

Sustainability Accounting, Management and Policy Journal, vol. 5 no. 1
Type: Research Article
ISSN: 2040-8021

Keywords

Article
Publication date: 19 April 2013

Bo Bae Choi, Doowon Lee and Jim Psaros

This study aims to report the extent of voluntary carbon emission disclosures by major Australian companies during the years 2006 to 2008. This paper provides contemporary data…

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Abstract

Purpose

This study aims to report the extent of voluntary carbon emission disclosures by major Australian companies during the years 2006 to 2008. This paper provides contemporary data and explanations about carbon emissions reporting in Australia. Additionally, the paper aims to determine the variables that explain the extent of carbon disclosures.

Design/methodology/approach

The carbon disclosure score is measured directly from individual companies' annual reports and sustainability reports. A checklist is established to determine the breadth and depth of the information related to climate change and carbon emissions incorporated in these publicly available reports.

Findings

The overall carbon disclosure score has increased significantly over the authors' research period. Furthermore, regression results show that larger firms with higher visibility tend to make more comprehensive carbon disclosures. Overall, the authors' results indicate that the legislation of the National Greenhouse and Energy Reporting Act (the NGER Act) in 2007 may have enhanced the voluntary carbon emission disclosures in 2008, even though the NGER Act was not operative until the 2009 financial year. From a theoretical perspective, the findings of the paper are consistent with legitimacy theory.

Originality/value

Previous studies examining environmental disclosures in Australia are based on a time period prior to widespread public discussion and interest in climate change and carbon emissions. By investigating voluntary disclosures made by large Australian companies around the time that the mandatory emission reporting scheme was introduced, this paper investigates whether the prominence of discussion and impending operation of the mandatory environmental disclosures have led to a greater extent of voluntary carbon disclosures. The findings can help regulators draft appropriate legislation that targets industries and specific practices where disclosure is of greatest importance to relevant stakeholders. In addition, an understanding of who and why entities disclose carbon gas emission information can arm green groups and other stakeholders with an appropriate level of understanding about the motivation for such disclosures.

Details

Pacific Accounting Review, vol. 25 no. 1
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 5 August 2021

Ajay Adhikari and Haiyan Zhou

This paper aims to exploit the varying level of responses to the carbon disclosure project (CDP) to assess the economic consequences of carbon emission disclosure by disclosure

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Abstract

Purpose

This paper aims to exploit the varying level of responses to the carbon disclosure project (CDP) to assess the economic consequences of carbon emission disclosure by disclosure level. Economic theory suggests that increased disclosures by a firm should lower the information asymmetry component of the firm’s cost of capital. Using CDP disclosures by US firms, the authors study the effect of voluntary carbon emission on the information asymmetry risk in capital markets.

Design/methodology/approach

The authors conduct cross-sectional analyses to examine whether, from the investor perspective, firms with varying CDP disclosure levels experience differential information asymmetric risk. The authors also conduct a pre- and post-disclosure comparison to examine whether the market responds to first-time carbon emission disclosure with decreases in the relative bid-ask spread.

Findings

In the cross-sectional analysis, the authors find that firms that decline to disclose carbon emission information, firms that provide incomplete information and firms that do not respond to the CDP survey have higher information asymmetry than firms that provide complete information and opt to make it available to the public. Using a pre- and post-disclosure comparison, the authors find that the market responds to first-time carbon emission disclosure with decreases in the relative bid-ask spread. Additionally, only firms that participate, provide complete disclosures and opt to make it available to the public enjoy the largest reduction in bid-ask spreads, which is followed by firms that provide incomplete information. Other firms do not experience a reduction in information asymmetry.

Research limitations/implications

This study examines the impact of CDP disclosures on information asymmetry using a US sample. The results of the study may not be generalizable to other countries that have different institutional arrangements and settings.

Practical implications

The study has important social and policy implications. The findings on the role of carbon emission disclosures in reducing information asymmetry in the capital markets suggest the need for policymakers to promote greater carbon emission disclosures in the USA and other countries where such disclosures have been traditionally less emphasized. As to stakeholders, bringing corporate carbon emission disclosure in line with recommended guidelines will require them to exercise more direct stakeholder pressure to encourage firms to fully participate in the CDP project. This is particularly critical in settings of regulatory inaction and weak enforcement with respect to environmental policies and disclosure such as the USA.

Social implications

The results span the current gap between two broad perspectives on corporate social responsibilities. The traditional shareholder perspective argues that companies only participate in socially responsible activities which increase shareholder value, while an alternate perspective argues that companies also undertake social responsibilities to benefit society even at the cost of shareholders (Moser and Martin, 2012). The study demonstrates that the two perspectives are not always at odds, carbon emission disclosure not only provides important information on the corporate social responsibility of the firm but also contributes to enriching the information environment leading to reduced information asymmetry in the equity markets for US firms. Thus, from both a stakeholder and capital market perspective, firms have incentives to provide carbon emission disclosures voluntarily. More direct stakeholder pressure may be helpful to encourage more firms to provide complete carbon emission information and opt to make it available to the public.

Originality/value

Few studies investigate the impact of CDP disclosure on the information environment of public companies. The lack of research on this key connection between new disclosures on carbon emissions and information asymmetry in the capital markets is the primary motivation for the paper. The study also provides important insights on disclosure level; just participating in the CDP survey is not enough, the degree of participation is also important. The results of the study suggest that the varying level of disclosure matters, the greatest benefits in terms of reduction of information asymmetry accrue to firms that provide complete information and opt to make it available to the public.

Details

Sustainability Accounting, Management and Policy Journal, vol. 13 no. 1
Type: Research Article
ISSN: 2040-8021

Keywords

Article
Publication date: 26 July 2021

Rina Datt, Pranil Prasad, Connie Vitale and Krishan Prasad

The market for the assurance of carbon emissions disclosures is showing intensive growth. However, due to the largely voluntary nature of carbon reporting and assurance, there are…

Abstract

Purpose

The market for the assurance of carbon emissions disclosures is showing intensive growth. However, due to the largely voluntary nature of carbon reporting and assurance, there are currently no clear standards or guidelines and little is known about it. The purpose of this paper is to examine the reporting and assurance practices for carbon emissions disclosures.

Design/methodology/approach

This study provides evidence on this market, with a sample that includes 13,419 firm-year observations across 58 countries between 2010 and 2017 from the Carbon Disclosure Project (CDP) database.

Findings

The results show that the demand for carbon emissions reporting comes mainly from North America, the UK and Japan. Recently, markets such as South Africa have also shown increased demand for carbon reporting. The data also shows that more firms are seeking assurance for their carbon emissions reports. Legitimacy, stakeholder and institutional theories are used to explain the findings of this study.

Research limitations/implications

The results have important implications for firms that produce carbon emissions disclosures, assurance service providers, legislators, regulators and the users of the reports and there should be more specific disclosure guidelines for level and scope of reporting.

Originality/value

Amongst the firms that do provide assurance on their carbon emissions reports, a majority do so using specialist assurance providers, with only limited assurance being provided. The results further show that a myriad of assurance frameworks is being used to assure the carbon emissions disclosures.

Details

Meditari Accountancy Research, vol. 30 no. 6
Type: Research Article
ISSN: 2049-372X

Keywords

Open Access
Article
Publication date: 11 April 2018

Merve Kılıç and Cemil Kuzey

The purpose of this study is to investigate whether corporate governance characteristics impact the voluntary disclosure of carbon emissions.

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Abstract

Purpose

The purpose of this study is to investigate whether corporate governance characteristics impact the voluntary disclosure of carbon emissions.

Design/methodology/approach

This empirical research was carried out in two stages. Initially, the carbon disclosures data were sourced from the annual and stand-alone sustainability reports of Turkish non-financial companies listed on Borsa Istanbul during 2011-2015. Later, the corporate governance characteristics that influence carbon disclosures were examined using panel data regression models.

Findings

The empirical findings of this study suggested that entities with a higher number of independent directors on their boards were more likely to respond to the Carbon Disclosure Project. In addition, board nationality diversity and the existence of a sustainability committee had a significant positive impact on the propensity to disclose carbon emissions and the extent of those disclosures.

Originality/value

This research provides empirical evidence of the determinants of carbon emission disclosures, which could be useful for organizations and regulatory bodies. Such an understanding is crucial to specify necessary policies that will provide emission reduction practices and policies for entities. This paper fills some of the gap in the literature by concentrating on the association between corporate governance characteristics and disclosures of a more specific environmental issue, being carbon emissions.

Details

International Journal of Climate Change Strategies and Management, vol. 11 no. 1
Type: Research Article
ISSN: 1756-8692

Keywords

Article
Publication date: 9 January 2024

Coky Fauzi Alfi, Maslinawati Mohamad and Khaled Hussainey

This study conducts a meta-analysis to investigate the impact of board diversity, independence and size on carbon emission disclosure.

Abstract

Purpose

This study conducts a meta-analysis to investigate the impact of board diversity, independence and size on carbon emission disclosure.

Design/methodology/approach

The results of 22 empirical investigations on the association between board qualities and carbon emission disclosure are synthesised using a meta-analysis approach. Inclusion and exclusion criteria are established, and search strategies are devised to locate relevant material. Data extraction entails gathering important information such as the names of the authors, variables and correlation coefficients. Fisher's z-transformation is used to compute and synthesise effect sizes and assumptions, sensitivity testing and subgroup analysis are performed to assess the robustness of the findings.

Findings

A substantial association was discovered between board characteristics and carbon emission disclosure. Board independence and gender diversity revealed small to medium-strength positive relationships, whilst board size had a medium-strength positive correlation. The study periods varied from 2011 to 2022, with 2018 having the most studies. However, highly heterogeneous groups were discovered; further subgroup analyses were then carried out to sort out this issue.

Research limitations/implications

Several limitations were recognised due to the limited number of studies and heterogeneity, although subgroup analysis was used to reduce the influence of heterogeneity. To investigate alternate outcomes, more analysis of the heterogeneity level and potential modifications to the model assumptions may be required.

Practical implications

Companies should consider board size, independence and gender diversity when formulating long-term competitive strategies in the climate change movement. These characteristics can aid in bridging information gaps and garnering stakeholder support for carbon-reduction initiatives.

Originality/value

This meta-analysis addresses a gap in the literature by addressing prior studies' conflicting and inconsistent findings on the association between board characteristics and carbon emission disclosure. It employs a rigorous approach and synthesis strategy to provide a thorough and robust understanding of the crucial role of board characteristics in carbon emission disclosure.

Details

Journal of Accounting Literature, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 14 June 2021

Denis Cormier and Charlotte Beauchamp

This study aims to assess the informativeness of carbon emission data for the stock markets and the mediating role played by financial analysts and the quality of the governance…

Abstract

Purpose

This study aims to assess the informativeness of carbon emission data for the stock markets and the mediating role played by financial analysts and the quality of the governance on this issue.

Design/methodology/approach

Relying on structural equation modelling, the authors assess the relation between embedded CO2 disclosure or CO2 emissions disclosure and the stock market valuation (Tobin Q), considering the mediating roles played by financial analysts (external monitoring) and corporate governance (internal monitoring).

Findings

Results based on a sample of North American firms in the oil and gas industry are the following. The disclosure of embedded CO2 is negatively associated with a firm’s market value, but this association is mediated by analyst following and corporate governance. The disclosure of yearly CO2 emissions is also negatively related to stock market value, while corporate governance mediates this negative impact, and analysts following does not. Considering that yearly CO2 emissions represent short-term environmental risks, whereas embedded CO2 represents long-term environmental risks, it appears important to consider embedded CO2 when studying the impact of carbon disclosure on firm value. The authors also show that a firm’s environmental performance (measured by Carbon Disclosure Project – CDP) is positively associated with two mediating variables (i.e. analyst following and corporate governance).

Originality/value

The study results suggest that CO2 emissions information is less relevant than embedded CO2 in attracting financial analysts when they are assessing a firm’s value because it represents short-term environmental risks, whereas embedded CO2 represents long-term environmental risks. Therefore, the authors consider important to include embedded CO2 when studying the impact of environmental disclosure on a firm’s value.

Details

Journal of Financial Reporting and Accounting, vol. 19 no. 5
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 27 September 2019

Ragini Rina Datt, Le Luo and Qingliang Tang

This study aims to examine whether good carbon performers disclose more carbon information overall than poor performers, and if yes, how firms select different types of carbon

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Abstract

Purpose

This study aims to examine whether good carbon performers disclose more carbon information overall than poor performers, and if yes, how firms select different types of carbon information to signal their genuine superior carbon performance.

Design/methodology/approach

The level of disclosure is measured based on content analysis of Carbon Disclosure Project (CDP) reports. The study sample consists of 487 US companies that voluntarily participated in the CDP survey from 2011 to 2012. The authors use the t-test and multiple regression models for analyses.

Findings

The results consistently indicate that firms with better carbon performance disclose a greater amount of overall carbon information, supporting the signalling theory. In addition, in contrast to previous studies that merely consider the overall disclosure level, the authors also investigate disclosure of each major aspect of carbon activities. The results show that good carbon performers disclose more key carbon items, such as goods and services that avoid greenhouse gas (GHG) emissions, external verification and carbon accounting, to signal their true type.

Research limitations/implications

This study has some limitations. The authors rely on CDP reports for analysis and focus on the largest companies in the USA. Caution should be exercised when generalising the results to other countries, smaller firms or voluntary carbon information disclosed in other communications channels.

Practical implications

Because carbon disclosure has already been moving from a voluntary to mandatory requirement in many jurisdictions, the format and content of CDP reports might be considered for a formal standalone GHG statement. Based on the results, the authors believe that there should be industry-specific disclosure guidelines, and more disclosure should be made at the project level.

Originality/value

In the context of climate change, this study provides support for the signalling theory by utilising the relationship between voluntary carbon disclosure and performance. The study also provides empirical evidence on how companies may use different types of carbon information to signal their underlying carbon performance.

Details

Accounting Research Journal, vol. 32 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

1 – 10 of over 2000