Abstract
The crossholding of multiple firms by major shareholders in the same industry is known as common ownership. In this article, we examine how common ownership affects the carbon-related disclosure practices of cross-held firms. We report that common ownership decreases a firm’s propensity to disclose carbon information as well as the quality of such disclosures. A one standard deviation increase in measures of common ownership decreases the likelihood of participating in the Carbon Disclosure Project (CDP) survey by as much as 19.4%. Our results are robust to exogenous events, such as changes in common ownership and robustness tests, including Heckman two-stage regression and the exclusion of the financial sector. Further analyses demonstrate that the negative impact of common ownership on carbon disclosures is stronger in carbon-intensive sectors than in other sectors and for hard than for soft disclosures.
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