Sustainable Development, Share Price and Carbon Disclosure Interactions: Evidence From South Africa's JSE 100 Companies

Abstract

AbstractThe gradual reorientation of the global economy towards accommodation of the idea of sustainable development has brought new thinking in terms of how corporates address issues pertaining to harmful carbon emissions that lead to global warming and in turn climate change. Hence, since 2007 a number of companies listed on the Johannesburg Stock Exchange (JSE) top 100 have joined the voluntary global Carbon Disclosure Project (now only known as the CDP) managed through the National Business Initiative. This initiative was partly occasioned by pressure from shareholders who wish to be associated with good environmental stewardship. The object of this paper was therefore to discover whether carbon disclosure, as a function of environmental and general disclosure, could be linked to share price movements of sampled JSE top 100 companies. The finding is that the share prices of companies that report voluntarily and participate on a regular or irregular basis in the CDP have experienced almost the same impact in terms of share price movements as a result of official disclosure of their carbon emissions. However, with the anticipated carbon tax implementation in 2014, the CDP report of 2013 demonstrated share price movement impact affecting participating companies. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment