Institutional Influence, Transition Management and the Demand for Carbon Auditing: The Chinese Experience

Abstract

The primary objective of this study is to investigate factors associated with the increase in demand for carbon auditing in China. Based on an analysis of publicly available carbon‐related information and data, the paper documents the large amount of carbon auditing that occurred in the public sector during the period 2009–2013. We find that the creation of carbon institutions and the significant increase in governmental green funding were the main reasons for the emergence of carbon auditing in this period. The change in models of economic development attempting to balance GDP growth and ecosystem protection, in addition to institutional reform, has led carbon auditing from rhetoric to practice. In addition, we show that carbon auditing serves as a tool for the management of transitions and the governance of sustainable socio‐technical and organisational innovation and transformation.

Corporate choice of providers of voluntary carbon assurance

“…In summary, we are currently in the transition toward a carbon-neutral economy, and carbon assurance is no doubt one of the most powerful tools that is expected to play a critical role in achieving carbon-reduction targets (Datt et al, 2018;Datt et al, 2019;Tang, 2019 Note. For example, although CDP provides the most comprehensive and comparable database for an international study, its database is primarily based on voluntary participation of the companies.…”

“…Further, the study is based on a sample of the largest companies in the world, so careful consideration should be exercised when generalizing the results to small-and medium-sized entities. In summary, we are currently in the transition toward a carbon-neutral economy, and carbon assurance is no doubt one of the most powerful tools that is expected to play a critical role in achieving carbon-reduction targets (Datt et al, 2018;Datt et al, 2019;Tang, 2019). There are many future research opportunities here.…”

“…In the case of carbon reporting, the carbon information is largely private knowledge of managers (Tang, 2019). Due to the separation of ownership and control, managers tend to maximize their own benefits rather than shareholders' value.…”

“…Financial statements can increase information transparency and require independent verification stipulated by law. In the case of carbon reporting, the carbon information is largely private knowledge of managers (Tang, 2019).…”

Blockchain, Climate‐related Risk Disclosures and EER

“…Dumay and Hossain (2019) describe the sustainability risk disclosure practices of Australian companies. Bui and Fowler (2019) examine how carbon accounting impacts strategy, while Tang (2019) describes the Chinese experience in the demand for carbon auditing.…”