Corporate Carbon Emissions and Financial Performance: Does Carbon Disclosure Mediate the Relationship in the UK?

Liu, Yang Stephanie; Zhou, Xiaoyan; Yang, Jessica; Hoepner, Andreas G. F.

doi:10.2139/ssrn.2941123

Cited by 34 publications

(58 citation statements)

References 84 publications

(151 reference statements)

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“…The finding provides a similar finding reported by previous studies such Liesen et al (2017) and Liu et al (2017). Consistent with H1, this study finds VCD quality is positively and significantly (p=.005) associated with firm value.…”

Section: Control Variablesupporting

confidence: 92%

“…Nevertheless, there is limited accounting studies on the market-value relevance of VCD particularly in developing countries. Moreover, how VCD affect https: //dx.doi.org/10.15405/epsbs.2018.07.02.23 Corresponding Author: Noor Raida Abd Rahman Selection and peer-review under responsibility of the Organizing Committee of the conference eISSN: 2357-1330 220 firms' value is less clear (Liu et al, 2017;Ganda, 2017). Kalu, Buang, and Aliagha (2016) assert that developing countries also responsible for a significant portion of the carbon emissions (CO2) and contribute to substantial global warming.…”

Section: Problem Statementmentioning

confidence: 99%

“…VCD enables internal and external parties of the firm to make informed decision and enhance the ability of the firm to manage risk and sustain competitive advantages (Venus, 2011). Several researchers such as Griffin and Sun (2013), Jaggi et al (2017) and Liu et al (2017) looked at the relationship between carbon disclosure and stock performance. They reported a positive effect of https: //dx.doi.org/10.15405/epsbs.2018.07.02.23 Corresponding Author: Noor Raida Abd Rahman Selection and peer-review under responsibility of the Organizing Committee of the conference eISSN: 2357-1330 221 carbon-related information disclosure on stock price.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Several studies find that carbon emission information reported in the annual report or sustainability report can enhance firm reputation as environmental responsibility companies, thus result in economic benefits There is, however, the current literature on the quality of GHG reporting quality is quite limited and little is known about how GHG reporting quality has developed or whether it has evolved and improve (Comyns & Figge, 2015). Additionally, value relevance of VCD is still incomplete and questionable (Ganda, 2017, Liu, Zhou, Yang, & Hoepner, 2017. This study attempts to provide insight into how VCD disclosure affects firm value and contribute to the ongoing debate on VCD and market's value nexus.…”

Section: Introductionmentioning

confidence: 99%

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Voluntary Carbon Disclosure And Firm Value: Evidence From Malaysian Carbon-Intensive Industries

Rahman¹

2018

The European Proceedings of Social and Behavioural Sciences

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Using a regression model with a sample of 114 Malaysian public listed companies operated in carbon-intensive industries, this study aims to explore the link between voluntary carbon reporting (VCD) quality and firm value. The quality of a VCD is measured based on disclosure score using a modified carbon disclosure index. The index was crafted based on MYCarbon Greenhouse gas (GHG) reporting guidelines.By utilising content analysis of the annual report for the year 2015, this study found that the quality of VCD influences firm's value. The result suggests that high quality standard of information provided could assist firms to achieve competitive advantages and create a strong firm reputation, eventually lead to the creation of firm value. For control variables, the empirical results indicate leverage and liquidity is associated firm's value. This study has a significant contribution towards VCD domain through the creation of a viable index instrument for future application and has a contribution to policy development, especially when considering the introduction of the specific standard on carbon disclosure as well as disclosure regulation.

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Section: Control Variablesupporting

confidence: 92%

Section: Problem Statementmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Voluntary Carbon Disclosure And Firm Value: Evidence From Malaysian Carbon-Intensive Industries

Rahman¹

2018

The European Proceedings of Social and Behavioural Sciences

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“…Several studies simultaneously use both return on assets (ROA) and return on equity (ROE) to control for profitability (most observations are from unlisted companies, and therefore, a proxy for profitability could not be market-based), as ROA reflects an operational performance and ROE a financial performance [40,44,46]. We also introduced return on sales (ROS) as it represents the short-term return [47]. Leverage ratios are used to inform about default risks that may lead to avoiding investment and financing.…”

Section: Independent Variables: Treatment and Controlmentioning

confidence: 99%

Transparency of Financial Reporting on Greenhouse Gas Emission Allowances: The Influence of Regulation

Montero

Calderón

Dias

2020

IJERPH

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This study focuses on the transparency of financial reporting on emission allowances (EA) and greenhouse gas (GHG) emissions within the European Union Emissions Trading Scheme (EU ETS). In particular, the different accounting treatments adopted by standard setters and professionals were analyzed to evaluate the influence of regulation in the transparency of financial reporting on EA and GHG emissions. Based on a sample of 85 companies registered with the Portuguese, Spanish, and French National Plans of Allocation (NPAs), data collected from the annual reports were analyzed for the 2008–2014 period. The results were obtained based on descriptive, logistic regressions and panel data statistical techniques, and they show that better levels of transparency of financial reporting on EA and GHG emissions are conditioned by a variety of accounting policies, which compromises the comparability of the financial information. The adoption of the International Accounting Standards Board (IASB) standards set lead to a greater dispersion in the choice of the accounting approach and a higher probability of not disclosing any information, as well as adopting off-balance sheet policies. Therefore, the regulatory factor is a determinant of the level of transparency of financial reporting on EA and GHG emissions, contributing to reduce strategies of omission.

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Carbon emissions and the cost of debt in the eurozone: The role of public policies, climate‐related disclosure and corporate governance

Palea

Drogo

2020

Bus Strat Env

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Over time, investors have become increasingly aware of the risks associated with a transition to a low-carbon economy. This study investigates the association between carbon emissions and the cost of debt financing for a sample of firms from the eurozone in the period 2010-2018. The results provide evidence that the risk premium required by lenders increases with carbon emissions. However, although the most polluting sectors were already charged before the Paris Agreement, and not further penalised in the subsequent period, our results indicate that the less polluting sectors started being charged a higher spread for their emissions only in the period after the Agreement. The Paris Agreement appears to be a turning point around which lenders have become aware of the strong commitment taken by policymakers in fighting climate change. Our findings also suggest that increased levels of disclosure on climate-related issues can mitigate corporate carbon risk. On the other hand, the results are not compelling when we consider the effect of control mechanisms, such as external verification for emissions, board oversight of carbon risk and the presence of emission reduction targets, on the cost of debt. Taken as a whole, the results demonstrate the effectiveness of public policies in driving lenders' allocation decisions as well as the role of climate-related disclosure in mitigating the corporate cost of capital. As such, our findings have important implications for both policymaking in environmental regulation and managerial strategies.

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Corporate Carbon Emissions and Financial Performance: Does Carbon Disclosure Mediate the Relationship in the UK?

Cited by 34 publications

References 84 publications

Voluntary Carbon Disclosure And Firm Value: Evidence From Malaysian Carbon-Intensive Industries

Voluntary Carbon Disclosure And Firm Value: Evidence From Malaysian Carbon-Intensive Industries

Transparency of Financial Reporting on Greenhouse Gas Emission Allowances: The Influence of Regulation

Carbon emissions and the cost of debt in the eurozone: The role of public policies, climate‐related disclosure and corporate governance

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