Factors influencing the disclosure of greenhouse gas emissions in companies world‐wide

TLDR

Companies worldwide disclose greenhouse gas emissions, with variation linked to whether their countries have ratified the Kyoto Protocol. The study analyzes factors influencing corporate disclosure of greenhouse gas emissions and climate change information globally. The authors performed a two‑stage empirical analysis using content analysis and a multiple‑linear regression model, incorporating firm size, leverage, ROA, ROE, market‑to‑book ratio, and dummy variables for the Kyoto Protocol, sector, and Dow Jones Sustainability Index membership. Results show that larger firms and those with higher market capitalization disclose more GHG information, while higher ROE is associated with less disclosure; firms in GHG‑related sectors report nearly all GRI core indicators and use such disclosures to legitimize themselves with stakeholder groups.

Abstract

Purpose The purpose of this study is to analyse different factors behind the disclosure of corporate information on issues related to greenhouse gas emissions and climate change world‐wide. Design/methodology/approach The empirical analysis carried out was performed in two stages: analysis of the data obtained through content analysis and analysis of the factors that influence the disclosure of greenhouse gas emissions and climate change using a dependency model, a multiple linear regression. Several variables were introduced to represent the size of the companies, leverage, return on assets (ROA), return on equity (ROE) and Market‐to‐Book ratio. Also, other dummy variables have been incorporated: Kyoto Protocol, activity sector in which the company operates and inclusion in the Dow Jones Sustainability Index. Findings The results obtained show a direct relationship between corporate size, its market capitalization and the disclosure of information in addition to proposed Global Reporting Initiative (GRI) indicators on greenhouse gas emissions. Conversely, an inverse relationship between ROE and disclosure is detected. Practical implications The findings emphasize that the main quoted companies operating in industries related to greenhouse gas emissions typically reveal information on almost all the GRI core indicators as well as the additional items specifically proposed for this issue. Moreover, the results suggest a trend for companies to utilize information on greenhouse gas emissions as a mechanism that enables them to legitimise themselves with those groups that can be of benefit to them. Originality/value The paper has analysed the disclosure of greenhouse gas emissions and other information of importance to climate change in companies from different countries, some of which have ratified, approved, adhered to or accepted the Kyoto Protocol, and some of which have still not accepted it.