Abstract
This paper studies the factors influencing the level of climate-related disclosure by Russian companies. It has several distinctive features in comparison to previous works: 1) climate change disclosure by Russian companies is studied for the first time; 2) textual analysis is used to evaluate the level of disclosure, and a new Russian glossary on climate change is compiled; 3) a unique set of indicators is used to assess the impact of factors on climate change disclosure. Legitimacy and signalling theories are used to formulate the hypotheses.
 The sample consists of 47 Russian companies with the largest market capitalization. Their 235 annual and sustainability reports for 2015-2019 are analysed. Using regression analysis, we show that a company’s absolute amount of greenhouse gas emissions, size, industry affiliation, and CDPrating positively affect its level of disclosure about climate change. In contrast, state ownership and a high debt burden have a negative impact. At the same time, the newness of assets, capital expenditures, interest coverage and company growth opportunities have no effect on climate change disclosure. Empirical results have confirmed the applicability of legitimacy theory to the Russian market. The present study will provide investors and regulators with tools for predicting a company’s impact on climate based on its level of climate change disclosure.
Highlights
Climate change is one of the most important challenges facing society today on account of the gravity of its possible consequences: changing weather, natural disasters, falling harvests, sea level rise, growing flood hazard, etc
The present paper has several distinctive features compared to previous works: 1) climate change disclosure by Russian companies is studied for the first time; 2) textual analysis is used to evaluate the level of disclosure, and a Russian glossary of climate change is compiled; 3) for the first time, a unique set of indicators is used to assess the impact of factors on climate change disclosure
Several glossaries on climate change compiled by major international organisations such as Intergovernmental Panel on Climate Change (IPCC) [29], the UN (the glossary of terms used by the United Nations Framework Convention on Climate Change (UN FCCC) [30]), and the World Bank [31] were used by the authors to make their own glossary of 500 words related to climate
Summary
Climate change is one of the most important challenges facing society today on account of the gravity of its possible consequences: changing weather, natural disasters, falling harvests, sea level rise, growing flood hazard, etc. In 2019, extreme weather conditions caused by climate change resulted in global losses of $100 billion [1]. By 2050, cumulative losses from climate change may amount to $8 trillion, reducing the global GDP by 3% [2]. Climate change may have an even more serious impact on the Russian economy: proliferating droughts, floods, forest fires, and permafrost thaw may result in the GDP falling by 3% even before 2030 [3]. A lot of institutional investors take climate-related risks into account when making investment decisions. To this end, they ask companies to disclose climate information [4]. The growing demand for climate-related information encourages companies to consider its disclosure. Despite the universality of this trend, the disclosure of such information by companies is inhomogeneous
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