Whether voluntary GHG disclosure could help improve subsequent GHG performance-new global evidence

In light of the Conference of Parties 26, carbon information reporting has become ever-increasingly important. Prior studies presented much evidence on whether environmental disclosure could reliably reflect environmental performance. However, very limited evidence has been provided on if environmen...

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Bibliographic Details
Published in:	Energy economics Vol. 141; p. 108039
Main Authors:	Li, Peigong, Li, Mingchen, Zhu, Wanwan, Lucey, Brian M.
Format:	Journal Article
Language:	English
Published:	Elsevier B.V 01.01.2025
Subjects:	GHG disclosure GHG disclosure environment GHG disclosure platform GHG disclosure strategy GHG information disclosure differences GHG performance GHG disclosure GHG disclosure environment GHG disclosure platform GHG information disclosure differences GHG disclosure strategy GHG performance
ISSN:	0140-9883
Online Access:	Get full text
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Summary:	In light of the Conference of Parties 26, carbon information reporting has become ever-increasingly important. Prior studies presented much evidence on whether environmental disclosure could reliably reflect environmental performance. However, very limited evidence has been provided on if environmental disclosure could drive firms to improve future environmental performance. Based on the competing theoretical predictions from the legitimacy theory and the “outside-in” management perspectives, this study provides new international insight into if carbon disclosure improvements could motivate future carbon performance improvement based on a change analysis. Particularly, the investigation uses a recently available carbon data set of both developed economies and developing economies from the Carbon Disclosure Project and other publicly available media platforms. We find that an improvement in carbon disclosure indicates a future carbon performance deterioration in developed economies, however, carbon disclosure changes are not related to future carbon performance changes in developing economies when using performance data from the Carbon Disclosure Project. When using performance data from other publicly available media platforms, carbon disclosure changes are not related to future carbon performance changes at all internationally. This indicates that the carbon information disclosed on other public media platforms has been intentionally beautified. Thus, firms' carbon performance changes from these platforms lose track of the prior changes in firms' carbon disclosure. •In developed economies, voluntary disclosure often hides worsening performance, hinting at greenwashing.•No link between carbon disclosure and performance found in developing economies across platforms.•Non-CDP data shows carbon disclosure is often misleading, overstating actual performance.•In developed economies, firms disclose more to mask worsening GHG performance, per legitimacy theory.•Standardized GHG reporting is needed to align carbon disclosure with actual performance globally.
ISSN:	0140-9883
DOI:	10.1016/j.eneco.2024.108039