Institutional dual ownership and voluntary greenhouse gas emission disclosure
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In: Journal of Corporate Finance, Vol. 89, 102671, 12.2024.
Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - Institutional dual ownership and voluntary greenhouse gas emission disclosure
AU - Barg, Johannes A.
AU - Drobetz, Wolfgang
AU - Ghoul, Sadok El
AU - Guedhami, Omrane
AU - Schröder, Henning
N1 - Publisher Copyright: © 2024 The Author(s)
PY - 2024/12
Y1 - 2024/12
N2 - This paper shows evidence of a positive relationship between institutional dual holders, who hold both equity and debt in a firm, and voluntary greenhouse gas (GHG) emission disclosure. Considering dual holders as particularly risk-sensitive institutional investors, we document that voluntary GHG emission disclosure improvements are motivated by not only climate-conscious but also risk-related considerations. The positive effect of institutional dual ownership is more pronounced when firms face severe environmental risks, where disclosure enables explanations and prevents exaggerated stakeholder reactions. The impact of dual ownership is also stronger in firms with poor information environments, where dual holders exploit their salient monitoring capacity from gathering information from their public equity and private debt holdings. Supporting our risk-based explanation, voluntary GHG emission disclosure reduces the cost of equity and increases firm valuation in firms with higher dual ownership.
AB - This paper shows evidence of a positive relationship between institutional dual holders, who hold both equity and debt in a firm, and voluntary greenhouse gas (GHG) emission disclosure. Considering dual holders as particularly risk-sensitive institutional investors, we document that voluntary GHG emission disclosure improvements are motivated by not only climate-conscious but also risk-related considerations. The positive effect of institutional dual ownership is more pronounced when firms face severe environmental risks, where disclosure enables explanations and prevents exaggerated stakeholder reactions. The impact of dual ownership is also stronger in firms with poor information environments, where dual holders exploit their salient monitoring capacity from gathering information from their public equity and private debt holdings. Supporting our risk-based explanation, voluntary GHG emission disclosure reduces the cost of equity and increases firm valuation in firms with higher dual ownership.
KW - Climate change
KW - Greenhouse gas emission disclosure
KW - Institutional investors
KW - Dual holders
KW - Management studies
UR - http://www.scopus.com/inward/record.url?scp=85206835016&partnerID=8YFLogxK
U2 - 10.1016/j.jcorpfin.2024.102671
DO - 10.1016/j.jcorpfin.2024.102671
M3 - Journal articles
VL - 89
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
SN - 0929-1199
M1 - 102671
ER -