The impact of carbon disclosure mandates on emissions and financial operating performance
Open accessAbstract
We examine the impact of a disclosure mandate for greenhouse gas emissions on firms’ subsequent emission levels and financial operating performance. For UK-incorporated listed firms a carbon disclosure mandate was adopted in 2013. Our difference-in-differences design shows that firms affected by the mandate reduced their emissions by about 8% relative to a control group of European firms. At the same time, our tests indicate that the treated firms experienced no significant changes in their gross margins. Taken together, our findings indicate that the reporting mandate had a real effect on the variable to be disclosed without adversely affecting the financial operating performance of the treated firms.
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Jouvenot and Krueger (2020), Downar et al. (2021), and Grewal (2021) find that affected U.K. firms lower greenhouse gas emissions following the 2013 U.K. carbon reporting mandate.
“All three studies find that the affected firms lower emissions.”
From Mandatory CSR and sustainability reporting: economic analysis and literature review (2021) · cites this paper as Downar et al. (2021)
Estimated effect sizes of the U.K. carbon reporting mandate on emissions range from 10% to 18%.
“The estimated effect sizes differ slightly, given the different designs and control groups, but range from 10% to 18%.”
From Mandatory CSR and sustainability reporting: economic analysis and literature review (2021) · cites this paper as Downar et al. (2021)
Cites
How does financial reporting quality relate to investment efficiency?
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Full Disclosure: The Perils and Promise of Transparency
Fung, A., Graham, M., & Weil, D. (2007) · doi:10.1017/cbo9780511510533 · Cited by 752 · see citing works
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Mandatory CSR and sustainability reporting: economic analysis and literature review
Christensen, H. B., Hail, L., & Leuz, C. (2021) · Review of Accounting Studies · doi:10.1007/s11142-021-09609-5 · Cited by 1,923 · see citing works
“Jouvenot and Krueger (2020), Downar et al. (2021), and Grewal (2021) examine whether this U.K. disclosure mandate creates stakeholder pressure for firms to subsequently reduce their GHG emissions.”
BackgroundThe multiverse of non-financial reporting regulation
Baboukardos, D., Gaia, S., Lassou, P., & Soobaroyen, T. (2023) · Accounting Forum · doi:10.1080/01559982.2023.2204786 · Cited by 57 · see citing works
- Authors
- Downar, B., Ernstberger, J., Reichelstein, S., Schwenen, S., & Zaklan, A.
- Affiliations
- Technical University of Munich (DE)
- University of Mannheim (DE)
- German Institute for Economic Research (DE)
- Corresponding author
- Schwenen, Sebastian
- Venue
- Review of Accounting Studies
- Published
- 2021-08-05
- Volume
- 26
- Issue
- 3
- Pages
- 1137-1175
- ISSN
- 1380-6653 (ISSN-L)
- 1573-7136
- OpenAlex
- W3192184667
- Cited by
- 425
- References
- 4
- Citations by year
- 2026: 102 · 2025: 119 · 2024: 90 · 2023: 68 · 2022: 34 · 2021: 7 · 2020: 1 · 2019: 2 · 2018: 1 · 2017: 1
- FWCI
- 44.37
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Locations
- Review of Accounting Studies (publishedVersion, cc-by)
- MADOC (University of Mannheim) (acceptedVersion, cc-by)
- Econstor (Econstor) (submittedVersion, cc-by)
- RePEc: Research Papers in Economics (submittedVersion)
- mediaTUM (Technical University of Munich) (submittedVersion)
- mediaTUM – the media and publications repository of the Technical University Munich (Technical University Munich) (submittedVersion, other-oa)
- GoeScholar The Publication Server of the Georg-August-Universität Göttingen (Georg-August-Universität Göttingen) (submittedVersion, cc-by)
- Funders
- Technische Universität München
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
- Social Sciences › Business, Management and Accounting › Accounting › Auditing, Earnings Management, Governance
- Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Governance and Financial Management
- Keywords
- greenhouse gas emissions, emissions disclosure, gross margin, disclosure requirements, corporate environmental disclosure, UK listed companies
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