TY - JOUR

T1 - Revisiting Carbon Disclosure and Performance

T2 - Legitimacy and Management Views

AU - Qian, Wei

AU - Schaltegger, Stefan

PY - 2017/7

Y1 - 2017/7

N2 - With corporate disclosure of carbon emissions rapidly increasing, the long-standing question remains whether carbon disclosure has any influence on the improvement of carbon performance. Previous studies of environmental disclosure and performance have predominantly focused on whether disclosure is a substitute for poor performance. Little attention has been devoted to the more important question about how changes in disclosure may lead to subsequent changes in performance over time. Following the rationales taken by the legitimacy and management perspectives, we revisit the relationship between carbon disclosure and performance, with a focus on changes that disclosure may (or may not) create. Using a change analysis of Global 500 companies and their carbon emission and disclosure data released between 2008 and 2012, this study finds that the change in carbon disclosure levels is positively associated with a subsequent change in carbon performance (examined through direct and indirect carbon emission intensities). Thus, regardless of whether disclosure has been used as a legitimising tool for prior poor performance, this study confirms that carbon disclosure motivates companies and creates an ‘outside-in’ driven effect for subsequent change and improvement in carbon performance. However, the association between changes in carbon disclosure and performance is relatively weaker in high energy-intensive firms.

AB - With corporate disclosure of carbon emissions rapidly increasing, the long-standing question remains whether carbon disclosure has any influence on the improvement of carbon performance. Previous studies of environmental disclosure and performance have predominantly focused on whether disclosure is a substitute for poor performance. Little attention has been devoted to the more important question about how changes in disclosure may lead to subsequent changes in performance over time. Following the rationales taken by the legitimacy and management perspectives, we revisit the relationship between carbon disclosure and performance, with a focus on changes that disclosure may (or may not) create. Using a change analysis of Global 500 companies and their carbon emission and disclosure data released between 2008 and 2012, this study finds that the change in carbon disclosure levels is positively associated with a subsequent change in carbon performance (examined through direct and indirect carbon emission intensities). Thus, regardless of whether disclosure has been used as a legitimising tool for prior poor performance, this study confirms that carbon disclosure motivates companies and creates an ‘outside-in’ driven effect for subsequent change and improvement in carbon performance. However, the association between changes in carbon disclosure and performance is relatively weaker in high energy-intensive firms.

KW - Sustainability sciences, Management & Economics

KW - Carbon disclosure

KW - Carbon performance

KW - Environmental disclosure

KW - environmental performance

KW - Scope 1 emission intensity

KW - Total carbon emission intensity

KW - Carbon disclosure

KW - Carbon performance

KW - Environmental disclosure

KW - environmental performance

KW - Scope 1 emission intensity

KW - Total carbon emission intensity

UR - http://www.scopus.com/inward/record.url?scp=85019657884&partnerID=8YFLogxK

U2 - 10.1016/j.bar.2017.05.005

DO - 10.1016/j.bar.2017.05.005

M3 - Journal articles

VL - 49

SP - 365

EP - 379

JO - British Accounting Review

JF - British Accounting Review

SN - 0890-8389

IS - 4

ER -