An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system

Abstract

Purpose -Institutional governance theory is used to explain voluntary corporate greenhouse gas (GHG) reporting in the context of a market governance system in the absence of climate change public policy. This paper seeks to hypothesise that GHG reporting is related to internal organisation systems, external privately promulgated guidance and EU ETS trading. Design/methodology/approach -A two-stage approach is used. The initial model examines whether firms' GHG disclosures are associated with internal organisation systems factors: environmental management systems (EMS), corporate governance quality and environmental management committees as well as external private guidance provided by the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP) for 187 ASX 300 firms. EU ETS trading is also included. Determinants of the extent and credibility of GHG disclosure is examined in the second stage where an index constructed from the GHG reporting standard "ISO 14064-1" items for a sub-sample of 80 disclosing firms as the dependent variable. Findings -Firms that voluntarily disclose GHGs have EMSs (uncertified and certified), higher corporate governance quality and publicly report to the CDP, tend to be large and in the energy and mining and industrial sectors. The credibility and extent of disclosures are related to the existence of a certified EMS, public reporting to the CDP, and use of the GRI. Firms that disclose more credible information are more likely to be large and in the energy and mining, industrial and services sectors. Originality/value -The paper shows that some proactive but pragmatic Australian firms are disclosing their GHGs voluntarily for competitive advantage in the current market governance system in the absence of public policy.

Accounts of nature and the nature of accounts

“…Under management's discretion, this information finds its way in narrative and quantitative form into periodic external reports (e.g. Kolk et al, 2008;Rankin et al, 2011;Hahn et al, 2015;Russell and Lewis, 2014;Rimmel and Jonäll, 2013;Boiral, 2016). The underlying technologies and platforms by which the information is produced, disseminated and communicated is constantly evolving in terms of event and continuous reporting, in terms of audio/visual formats, private and oral reporting (e.g.…”

Environmental management practices, environmental technology portfolio, and environmental commitment: A content analytic approach for UK manufacturing firms

“…Following this argument, we Size-Larger firms have more resources available for environmental initiatives, are more scrutinised, and tend to have higher propensity of environmental disclosure (Rankin, Windsor and Wahyuni, 2011). Following their argument, this study used natural logarithm of the market capitalisation to control the influence of firm size, to negate the impact of outliers and high skewness in raw data ( Table 1 provides the details of the sample profile).…”

Strategies for Climate Change and Impression Management: A Case Study Among Canada’s Large Industrial Emitters

“…The disclosure of climate performance can also be achieved through more specific media, such as the Carbon Disclosure Project (CDP), in which a growing number of FT500 companies participate (Pinkse and Kolk 2009). Regardless of the mode of disclosure used, business decisions in this area are not necessarily motivated by the search for more transparency and accountability (e.g., Dawkins and Fraas 2010;Hrasky 2012;Rankin et al 2011;Reid and Toffel 2009). According to the voluntary disclosure theory, proactive organizations tend to use sustainability reports to demonstrate their commitment and good performance in this area (e.g., Bewley and Li 2000;Clarkson et al 2008).…”