The debate surrounding climate change often centers on companies' contributions to global warming, which has led to an increase in the importance of carbon disclosure. We evaluate the current state of related research and identify its trends, coherences, and caveats via a systematic literature review. Sociopolitical theories of disclosure, economic theories of disclosure, and institutional theory serve as the main theoretical anchors for our exploration. The existing research emphasizes the determinants and, to a lesser extent, effects of carbon disclosure, as well as the associated regulatory issues such as voluntary versus mandatory disclosure. Additionally, we discuss related topics, such as assurance and risks. We find that a large portion of scholarly work provides no link to theory, despite the fact that such links can be identified, for example, from the financial disclosure literature. Finally, we report on the established knowledge and examine the need for additional research.

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Organizational performance is a fundamental construct in strategic management. Recently, researchers proposed a framework for organizational performance that includes three dimensions: accounting returns, growth, and stock market performance. We test the construct validity of indicators of these dimensions by examining reliability, convergent validity, discriminant validity, and nomological validity. We conduct a confirmatory factor analysis with 19 analytically derived indicators on a sample of 37,262 firm-years for 4,868 listed U.S. organizations from 1990 to 2010. Our results provide evidence of four, rather than three, organizational performance dimensions. Stock market performance and growth are confirmed as separate dimensions, whereas accounting returns must be decomposed into profitability and liquidity dimensions. Robustness analyses indicate stability of our inferences for three dissimilar industries and for a period of 21 years but reveal that organizational performance dimensions underlie dynamics during years in which environmental instability is high. Our study provides an initial contribution to the clarification of the important organizational performance construct by defining four dimensions and validating indicators for each dimension. Thus, we provide essential groundwork for the measurement of organizational performance in future empirical studies.

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Although stakeholder theory is widely accepted in environmental disclosure research, empirical evidence about the role of stakeholders in firms’ disclosure is still scarce. The authors address this issue for a setting of carbon disclosure. Our international sample comprises the Carbon Disclosure Project (CDP) Global 500, S&P 500, and FTSE 350 reports from 2008 to 2011, resulting in a total of 1,120 firms with 3,631 firm-year observations. The authors apply Tobit regressions to analyze the relationship between carbon disclosure and the relevance of the following stakeholder groups: government, general public, media, employees, and customers. Our results confirm that in addition to carbon performance, all stakeholders are associated with carbon disclosure. Only one stakeholder group (government) acts as a moderator for the relationship between carbon performance and carbon disclosure. Furthermore, the authors find that carbon performance but not the affiliation to a carbon-intensive industry acts as a moderator between stakeholder relevance and carbon disclosure.

Materiality is an ambiguous concept in sustainability reporting where potential users are more heterogeneous than in financial reporting. Building on decision usefulness and dual process theory, we scrutinize in an experimental setting how two important stakeholder groups react to manipulations of the topic of nonfinancial information while controlling for differences in nonfinancial performance. We find that potential employees consider nonfinancial information as generally more material compared with capital market participants. Furthermore, for capital market participants, the nonfinancial topic of energy is more material than the topic of biodiversity, while for potential employees, both topics are equally material. Capital market participants seem to follow a more analytic decision-making process than potential employees. Capital market participants also adjust their decisions in combination with quantitative performance differences, and their risk assessment of a company mediates their decisions. Our findings show that materiality of nonfinancial information lies in the eye of the beholder.

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