Carbon Disclosure Research Articles

Environmental sustainability in cardiovascular practice: current challenges and future directions.

Cardiovascular disease is the leading cause of morbidity and mortality worldwide, with a substantial amount of health-care resources targeted towards its diagnosis and management. Environmental sustainability in cardiovascular care can have an important role in reducing greenhouse gas emissions and pollution and could be beneficial for improving health metrics and societal well-being and minimizing the cost of health care. In this Review, we discuss the motivations and frameworks for sustainable cardiovascular care with an emphasis on the reduction of the climate-related and environmental effects of cardiovascular care. We also provide an overview of greenhouse gas emissions related to the provision of health care, including their measurement and quantification, carbon accounting, carbon disclosures and climate effects. The principles of life-cycle assessment, waste prevention and circular economics in health care are discussed, and the emissions associated with various sectors of cardiovascular care as well as the rationale for prevention as a powerful approach to reduce these emissions are presented. Finally, we highlight the challenges in environmental sustainability and future directions as applicable to cardiovascular practice.

Value of blockchain for scope 3 carbon disclosure: The moderating role of data processing technologies

Disclosing carbon emissions in Scope 3 is essential for mitigating pollution and the associated environmental damage, and blockchain can enhance the disclosure. However, the effect of blockchain on Scope 3 carbon disclosure remains unclear due to a lack of empirical evidence. This paper investigates the value of blockchain for Scope 3 carbon disclosure and examines whether this value can be strengthened by integrating data processing technologies, including artificial intelligence (AI), cloud computing, and big data analytics (BDA). Drawing upon the coordination theory, we posit that blockchain as a recording and tracing technology can improve the coordination among supply chain members on collecting carbon emissions data, thereby facilitating firms' Scope 3 carbon disclosure. Furthermore, data processing technologies enable efficient utilization and management of the collected data, potentially coordinating with blockchain to enhance Scope 3 carbon disclosure. We test these relationships using regression analysis based on a sample of 422 observations for Chinese listed firms during 2021 and 2022. The results show that blockchain adoption is positively associated with a firm's Scope 3 carbon disclosure. In addition, adopting each of the three data processing technologies—AI, cloud computing, and BDA—further strengthens the positive relationship. This study contributes to academic knowledge and evidence on blockchain and sustainable supply chain management with practical suggestions for managing carbon emissions at the supply chain level through the combined adoption of blockchain and data processing technologies.

The effect of board of directors attributes, environmental committee and institutional ownership on carbon disclosure quality

AbstractThis study assesses the effect of the board of directors' attributes, environmental committee (EC), and institutional ownership (IO) on carbon disclosure quality (CDQ) from the perspectives of legitimacy and agency theories in Malaysia. This study collects and analyzes data based on 1000 observations of firms from carbon‐intensive industries from 2015 to 2019. The effect of the board of directors' attributes, EC, and IO on the CDQ was observed using a panel data regression model. The study revealed a significant positive relationship between board independence, board size, female representation, EC, IO, and CDQ. These findings suggest that carbon disclosure awareness is rising in Malaysia as firms have gradually integrated corporate governance (CG) best practices into their business strategies. To the best of our knowledge, this is the first study to examine the factors that influence CDQ in Malaysian businesses. This study identified firms with a higher CDQ using a new global reporting initiative‐based carbon reporting index. This expands the literature on carbon disclosures. This study focuses on carbon‐intensive industries, which might not reflect Malaysia's current CDQ situation. Thus, future research should focus on other sectors to fully grasp the current state of the CDQ in Malaysia and offer new perspectives on emerging markets. The findings may benefit a vast group of regulatory bodies in assessing Malaysian firms' responses to local and international carbon guidelines.

Climate board governance and carbon assurance – European evidence

Purpose This paper aims to investigate the effect of climate board governance based on (1) carbon change committees, (2) critical mass of female board members and (3) carbon-related executive compensation, on the voluntary implementation and quality of carbon assurance. Design/methodology/approach Using stakeholder and critical mass theories, 978 firm-year observations for European Union firms for the 2017–2021 period are collected. Climate board governance and carbon assurance proxies come from the Carbon Disclosure Project. Findings Correlation and logit regression analyses show that climate board governance significantly improves carbon assurance (quality). The findings are robust to various robustness and endogeneity checks and are of great importance for researchers, regulators and business practice. Originality/value This analysis mainly contributes to previous studies by using a combined sustainable board governance score as a major driver of corporate carbon assurance practices for the first time.

Category-specific benchmarking of Scope 3 emissions for corporate clusters

Although the majority of corporate emissions is assigned to the upstream and downstream value chain (Scope 3) rather than to direct emissions (Scope 1) and emissions from energy purchases (Scope 2), Scope 3 data are often insufficient, and their collection is complex due to many reference variables. Therefore, Scope 3 reporting by more than 4000 companies worldwide in 2022 is examined using data from the CDP (formerly Carbon Disclosure Project). All fifteen categories of this Scope as defined by the Greenhouse Gas Protocol are considered. To enhance the benchmarking results, corporate clusters based on size and industry are built after analyzing which factors significantly influence Scope 3.Based on the results, a benchmarking for the emissions per yearly turnover is carried out and examined on five case studies. As the manufacturing industry comprises various subindustries ranging from plastics to automotive, the cluster consisting big enterprises is further subdivided. Based on two case studies, it is possible to demonstrate that emission hotspots may be situated in diverse categories although companies belong to the same cluster. Companies can use the results for an initial estimation of category-specific Scope 3 emissions, e.g., regarding their sustainability reporting. The novelty of this work is a category-specific benchmarking of Scope 3 emissions considering corporate clusters based on companies worldwide and considering industry and size.

Carbon disclosures and information asymmetry: Empirical evidence on the importance of text in understanding numerical emission allowance disclosures

AbstractCarbon disclosures are essential for investors to evaluate firms’ efforts to combat climate change. In this study, we focus on a specific type of carbon disclosures—namely, emission allowance disclosures—that capture how firms implement emission reductions under the European Union emission trading system (EU ETS). Given the continuously changing institutional features of the EU ETS and the lack of authoritative guidance on how firms should account for emission allowances in their financial statements, it is exceedingly difficult for investors to understand numerical emission allowance disclosures and to compare them across—and even within—firms. Motivated by this criticism, we hypothesize and find that textual disclosures complementing numerical emission allowance disclosures are associated with lower information asymmetries between firms and their investors. Further analyses show that textual disclosures that: (i) describe the accounting approach, and (ii) contain institutional information on the EU ETS, respectively, are particularly important for improving the information environment of numerical emission allowance disclosures. Overall, our findings suggest that text can improve the understanding of numbers in a carbon disclosure context. Therefore, our study not only contributes to the (industrial ecology) literature but also has important implications for regulators, policymakers, investors, financial analysts, and firms.

Comparative Assessment of Environmental Disclosure Practices: A Case Study of Two Leading Oil Companies in India

This study conducts a comparative analysis of the environmental disclosure practices of two leading oil companies in India: OIL and Petronet LNG. By evaluating their sustainability reports and publicly available environmental information, the research assesses key performance areas such as energy consumption, greenhouse gas emissions, water management, waste treatment, and biodiversity conservation. The analysis reveals that both companies exhibit similar environmental disclosure practices, with strengths in energy and emissions management but significant gaps in compliance, biodiversity, and grievance mechanisms. A statistical t-test shows no significant difference between the environmental performance of the two companies, indicating comparable transparency levels. The study highlights the need for both organizations to improve their environmental reporting and align more closely with global sustainability standards, such as the Global Reporting Initiative (GRI) and Carbon Disclosure Project (CDP). Recommendations include enhancing biodiversity conservation efforts, strengthening supplier environmental assessments, and improving compliance with environmental regulations. Keywords: Environmental disclosure, Oil industry, Sustainability reporting, Comparative analysis, India, Greenhouse gas emissions, Energy management, Water usage, Biodiversity, Compliance, Corporate social responsibility (CSR).

Diverse boards and firm performance: The strategic role of carbon disclosure in heavily polluting companies in Bangladesh

Diverse boards and firm performance: The strategic role of carbon disclosure in heavily polluting companies in Bangladesh

PROFITABILITY, LEVERAGE, CARBON EMISSION DISCLOSURE: THE MODERATING ROLE OF PROFIT GROWTH

This research examines the relationship between leverage, profitability, and carbon disclosure in the Indonesia Stock Exchange (IDX) energy industry from 2019 to 2022. As a moderator, this study also examines how profit growth affects the relationship between the three variables. Panel data multiple linear regression analysis served as the method of hypothesis testing. This study analyzes data on energy sector businesses listed on the Indonesia Stock Exchange during 2019–2022, totaling 84 observation periods. The results showed how profitability and leverage significantly negatively impacted carbon disclosure. Profit growth highlights how negatively profitability affects carbon disclosure. However, the relationship between leverage and carbon emission disclosure remains despite revenue increases. The findings provide important insights into the disclosure practices of the energy sector concerning carbon emissions and their impact on environmental sustainability. Based on the study's findings, businesses and pertinent parties should be able to develop policies that support the transition to a more sustainable energy industry.

The phenomenon of China’s carbon accounting policies and practices

Purpose This study aims to explore China’s carbon accounting policies and practices to enhance its carbon accounting and trading practices and achieve carbon neutrality. Design/methodology/approach This study adopts a phenomenological methodology to explore carbon accounting by setting the scope of the phenomenon, establishing research methods, conducting interviews with 30 participants from 14 emitting entities and four accounting firms and establishing methods for data analysis. Five themes were identified using a five-step coding method. Findings The results show no uniformity in the accounting treatment of carbon trading; however, common characteristics exist, and they have generally adopted simplified and conservative accounting methods under China’s emission trading scheme. Their common characteristics are that the granted allowances are not recognised as assets by most emitting entities, emissions allowance assets are measured using the historical cost method, most emitting entities only conduct accounting when there are actual cash flows or outflows with regard to carbon emissions allowance trading, and only a few emitting entities disclose carbon trading information in their financial statements or corporate social responsibility reports. Originality/value This study highlights accountants’ crucial role in carbon activities by guiding emitting entities’ low-carbon initiatives and culture and transforming managers’ mindsets. It also introduces the China Accounting Standards Committee-based accounting methods for allowances and obligations, aiding carbon disclosure quality and sustainability. These findings also inform the carbon accounting standards that may enhance corporate accountability and address climate change.

Climate risks, financial performance and lending growth: Evidence from the banking industry

This study examines the impact of climate-related risks, specifically physical and transition risks, on bank performance and lending growth. Using panel data from 147 international banks across 37 countries from 2011 to 2020 and climate data from the Carbon Disclosure Project, our findings show that transition risks positively impact both performance and lending growth, whereas physical risks negatively impact performance and loan growth. Consequently, the inclusion of transition risks in banks' risk frameworks has allowed them to benefit from climate-related policy changes imposed by regulatory bodies, but this does not hold true for physical risks. Although banks recognize the severe impact that physical risks may have on their businesses, they still cannot protect their performance against extreme weather events, particularly because most of these events are characterised by a high degree of uncertainty.

Understanding the Effect of Climate Risk on Banking Business—A Panel Data Analysis of Indian Firms

The enormous phenomenon of climate change, which is affecting many organisations of different sectors today, has a special impact on the financial sector in terms of credit risk. Awareness and action on environmental, social and governance (ESG) goals and climate change impacts have been rapidly increasing worldwide. In this article, we present a firm-level panel data analysis to link ESG ratings and CO2 emissions with the default risk and solvency position of selected companies. We perform various univariate and multivariate analyses on selected top Bombay Stock Exchange (BSE) top 200 companies that have disclosures in Carbon Disclosure Project (CDP) reports over 5 years (2017–2021). We find strong empirical evidence that a firm’s risk of default is linked to its environmental performance along with the level of carbon emission. Our findings will enable banks to establish a linkage between credit risk and climate change risk. This will assist banks as well as policymakers to adjust borrower-level ratings and align their lending and investments with net zero emissions. JEL Codes: G32, G33, Q2, Q5

The Effect of Firm Value, Financial Performance, Environmental Performance, and Firm Size on Carbon Disclosure

The Effect of Firm Value, Financial Performance, Environmental Performance, and Firm Size on Carbon Disclosure

Chief Sustainability Officer (CSO) power and sustainability-based compensation for climate change disclosure and carbon performance: is it different for developed and developing nations?

Purpose Companies are increasingly appointing a Chief Sustainability Officer (CSO) to anchor the need to highlight climate change at the senior management level. This study aims to examine how CSO power and sustainability-based compensation influence climate reporting and carbon performance. Design/methodology/approach Using one of the largest data sets to date, consisting of 18,834 company years through the author’s observations, spanning an 11-year period (2011–2021) in 33 countries. This paper used quantitative methods – specifically, ordinal logistic regression estimation. This paper measures the level of climate change disclosure based on the carbon disclosure leadership methodology. Carbon performance is based on the intensity of carbon emissions (Scope 1, Scope 2), which is a quantitative and relatively more objective measure. Findings The results suggest that climate change disclosure continued to increase and the carbon emissions intensity of the companies in this study gradually decreased over the sample period. This paper finds that the presence of the CSO within the top management team has a positive and significant influence on the level of information on climate change of the companies in the sample. This finding confirms the idea that the managerial capacity of CSOs motivates the disclosure of climate change. The empirical results confirm that there are differences in the role that the CSO and sustainability-based compensation play in influencing the quality of climate information disclosure in developed and developing countries. Originality/value The recourse on a mixed theoretical framework, which highlights upper echelons theory, argues the understanding of the role of CSOs in explaining the relationship between climate change disclosure–carbon performance relationship. The novelty of the study lies in the approaches adopted to describe the quality of climate change disclosure. To control for endogeneity, this paper uses a difference-in-difference analysis by adding a firm to the Morgan Stanley Capital International index as an exogenous shock.

Oil price uncertainty and corporate carbon performance: An international investigation

Drawing on legitimacy theory and stakeholder theory, this study examines whether oil price uncertainty (OPU) affects corporate carbon performance (CCP) in the international context. Based on data extracted from CDP (previously known as the Carbon Disclosure Project), World Bank, and Thomson Reuters Eikon databases, the study's sample consists of 9074 firm-year observations over the period 2011–2018 for all non-financial multinational companies invited to take part in the CDP questionnaire. Using an ordinary least squares regression model, we identify a strong relationship between OPU and carbon emissions performance. Our findings are robust to a battery of sensitivity tests, all of which support our original results. This study contributes new knowledge regarding the influence of OPU on CCP. The results will be of interest to investors and policymakers as they provide a useful basis for understanding OPU and its impact on CCP to promote better decision-making.

Green supply chain management for carbon accountability

As disclosure mandates shift their focus towards supply chain carbon accountability, firms are compelled to enhance carbon outcomes throughout their supply chain. The literature suggests that green supply chain management (hereafter, GSCM) plays an essential role in enhancing firms' environmental performance. However, there is a dearth of evidence on the possible informational effects of GSCM on Scope 3 carbon outcomes despite their mutual linkage to supply chains. Using two novel measures of GSCM quality, defined as the extent to which environmental objectives are integrated into supply chain management processes, we find that higher GSCM quality increases the likelihood of a focal customer's Scope 3 carbon disclosures and reduces its Scope 3 carbon footprint. These effects of GSCM quality are realized through improvements in relational trust among customer-supplier relationships and in suppliers' environmental innovation capabilities. Further analysis reveals that the effects of GSCM quality are realized among durable customer-supplier relationships. We identify GSCM quality as an essential and distinct component of corporate environmental governance. These findings highlight the importance of GSCM quality for attaining supply chain carbon transparency and accountability.

Carbon management accounting an evolving approach to enhance transparency and accountability in accounting and reporting practices

Purpose This study aims to examine the factors driving the adoption of carbon management accounting (CMA) and various considerations that mediate its effectiveness in accounting and disclosure practices. Design/methodology/approach This study used an exploratory, cross-sectional, quantitative design. Academics, managements/executives, professional accountants, professional auditors and researchers served as the primary units of analysis. This study used a survey method to gather data through a structured online questionnaire. The data were analyzed using descriptive statistics and partial least squares structural equation modeling (PLS-SEM). Findings The results revealed that the factors driving the adoption of CMA directly influence the effectiveness of CMA practices, with a significant mediating effect of regulatory and ethical aspects. Furthermore, this study revealed the difficulty of accounting, quantifying and reporting carbon emissions and revenue generation from the trading of carbon credits. This highlights the critical role of standard-setters and academics in deciding the concrete methodology to promote uniformity in carbon disclosures. Research limitations/implications The major limitations of this study are that it considered only the perception of experts and did not study the actual practices of CMA by considering companies that have already implemented CMA. Further studies should consider this aspect to validate the results of this study. Furthermore, the findings highlight the insignificant effect of economic, environmental and social aspects in enhancing the overall effectiveness of CMA. This is because of the limited number of factors considered in the study of such metrics. To overcome this limitation, future studies should consider wider aspects to validate the outcomes of this study. Practical implications The major contribution of this study is that it serves as a base input for business organizations, academics, researchers and regulatory authorities who are working to implement CMA strategies to reduce carbon emissions and promote net-zero business practices. Originality/value The outcome of this study is unique and new, as the subject matter of this study is in the nascent stage. The outcome of this study may become a significant valid input for regulators and policymaking companies to gain knowledge about CMA practices and motivate them to integrate CMA practices as part of their sustainability initiatives.

Deterrents for corporate carbon disclosures: a study on Indian corporations using Grey-DEMATEL approach

PurposeGlobally, the landscape of corporate carbon disclosures (CCD) is continually evolving as societal, environmental and regulatory expectations change over time. The goal of this study is to examine the challenges faced by Indian firms’ corporate carbon reporting (CCR). The literature recognized the hurdles to reaching net zero emissions and decarbonization, which are equally applicable to carbon disclosure (CD).Design/methodology/approachThe scope 3 emission disclosure barriers (S3EDBs) identified from the literature were ranked, and their relationships were discovered using the “Grey-based decision-making trial and evaluation laboratory” (Grey- DEMATEL) technique.FindingsThe key findings are the S3EDBs, the most prominent barriers, their interrelationships and important insights for managers of organizations in prioritizing the action area for scope 3 CD. Eight S3EDBs were categorized in terms of cause and effect, threshold value is calculated as 0.78. “Quality, and reliability of data,” “Government policies and statutory requirement on emission disclosure” and “Traceability and managing supply chain partners” are the most prominent S3EDBs.Practical implicationsThe results will help industry people in countries with emerging economies that have significant scope 3 carbon footprints. The managers can plan to deal with top S3EDBs as a step towards decarbonization and ultimately fighting climate change (CC).Originality/valueThis study is one of the first to rank these barriers to CD so that industry practitioners can prioritize their actions. The core contribution of this research is to detect the most significant S3EDBs and their interdependencies.

CDP (carbon disclosure project) emissions of CO2 and environmental disclosure quality: the mediating role of media legitimacy and governance

ABSTRACT The paper assesses the relation between firms’ CO2 emissions as per the CDP (formerly known as Carbon Disclosure Project) platform and their environmental disclosure quality, as mediated by two monitoring mechanisms: media legitimacy (external) and firm governance (internal). Legitimacy theory as well as the monitoring dimension of agency theory underlie the empirical investigation. The sample comprises Canadian and U.S. firms, for which a governance disclosure score and media legitimacy information are available from Bloomberg. Relying on structural equations modelling, results are the following. First, CDP disclosing firms exhibit an environmental disclosure score that is twice as high as non-disclosing firms. Second, media legitimacy, expressed by the Janis-Fadner index, is significantly lower for CDP disclosing firms. This may explain why high CO2 emission firms are less inclined to disclose CDP emission data. Third, the direct effect of the decision to disclose CDP emissions of CO2 (full sample) on environmental disclosure quality is positive and significant. Consistent with our hypotheses, we observe an indirect (mediating) effect on this relationship of media legitimacy (external monitoring) and corporate governance (internal monitoring). This suggests that media legitimacy and corporate governance enhance the positive impact of the decision to disclose CDP emissions of CO2 on environmental disclosure quality. Fourth, the direct effect of CDP emissions of CO2 (reduced sample) and environmental disclosure quality is positive and significant. Also consistent with our hypotheses, we observe an indirect effect on this relationship from media legitimacy and corporate governance.

The impact of digital carbon communication on market response to carbon disclosure: The moderating effects of external supervision

This study investigates the influence of digital carbon communication quality (DCC) on market response to carbon disclosure within the reality of government environmental regulation and media attention, employing a DCC index constructed by an Autoencoder model. Using Chinese data from 2015 to 2022, we find that DCC mitigates negative market response to carbon disclosure by alleviating information asymmetry and enhancing corporate environmental performance, especially when government environmental regulation or media attention is insufficient. Moreover, DCC exhibits a stronger impact on the carbon disclosure market responses in firms with low institutional shareholdings, non-state-owned firms, and firms with high emission levels.