IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v30y2021i8p3721-3739.html
   My bibliography  Save this article

Corporate climate‐related voluntary disclosures: Does potential greenwash exist among Australian high emitters reports?

Author

Listed:
  • Linda Kusumaning Wedari
  • Christine Jubb
  • Amir Moradi‐Motlagh

Abstract

This study examines the issue of greenwashing among corporate high emitters subject to government scrutiny. To do so, we investigate the relationship between the actual environmental performance, measured as carbon emissions, of companies subject to the Australian National Greenhouse Energy Reporting Act 2007 (NGER) and their climate‐related voluntary disclosures. To measure climate‐related disclosure, we construct a climate‐related disclosure index based on four prominent frameworks and score corporate report content against that Index. Using a sample of 150 companies with NGER emissions data for Years 2016 and 2017, a period that precedes the issuance of recommendations for disclosure by the Task Force on Climate‐Related Financial Disclosure (TCFD), our regression results show a disappointingly low level of climate‐related disclosure by most companies. We also find a negative relationship between climate‐related disclosure and 1‐year lagged environmental performance among companies exhibiting a year‐on‐year rise in carbon emissions. That is, our findings provide evidence of potential greenwashing by poor environmental performers, presumably to change negative perceptions by stakeholders, as predicted by socio‐political theories. In contrast, we find no evidence of greenwashing among companies experiencing a year‐on‐year decrease in emissions.

Suggested Citation

  • Linda Kusumaning Wedari & Christine Jubb & Amir Moradi‐Motlagh, 2021. "Corporate climate‐related voluntary disclosures: Does potential greenwash exist among Australian high emitters reports?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3721-3739, December.
    • Handle: RePEc:bla:bstrat:v:30:y:2021:i:8:p:3721-3739
    DOI: 10.1002/bse.2836
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.2836
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.2836?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Carol A Tilt & Christopher F Symes, 1999. "Environmental disclosure by Australian mining companies: environmental conscience or commercial reality?," Accounting Forum, Taylor & Francis Journals, vol. 23(2), pages 137-154, June.
    2. Patten, Dennis M., 2002. "The relation between environmental performance and environmental disclosure: a research note," Accounting, Organizations and Society, Elsevier, vol. 27(8), pages 763-773, November.
    3. Zabihollah Rezaee & Ling Tuo, 2019. "Are the Quantity and Quality of Sustainability Disclosures Associated with the Innate and Discretionary Earnings Quality?," Journal of Business Ethics, Springer, vol. 155(3), pages 763-786, March.
    4. Perera, Luckmika & Jubb, Christine & Gopalan, Sandeep, 2019. "A comparison of voluntary and mandated climate change-related disclosure," Journal of Contemporary Accounting and Economics, Elsevier, vol. 15(2), pages 243-266.
    5. My Hanh Doan & Remmer Sassen, 2020. "The relationship between environmental performance and environmental disclosure: A meta‐analysis," Journal of Industrial Ecology, Yale University, vol. 24(5), pages 1140-1157, October.
    6. Mary Gugerty, 2009. "Signaling virtue: voluntary accountability programs among nonprofit organizations," Policy Sciences, Springer;Society of Policy Sciences, vol. 42(3), pages 243-273, August.
    7. Florence Depoers & Thomas Jeanjean & Tiphaine Jérôme, 2016. "Voluntary Disclosure of Greenhouse Gas Emissions: Contrasting the Carbon Disclosure Project and Corporate Reports," Journal of Business Ethics, Springer, vol. 134(3), pages 445-461, March.
    8. Patten, Dennis M., 1992. "Intra-industry environmental disclosures in response to the Alaskan oil spill: A note on legitimacy theory," Accounting, Organizations and Society, Elsevier, vol. 17(5), pages 471-475, July.
    9. Riccardo Torelli & Federica Balluchi & Arianna Lazzini, 2020. "Greenwashing and environmental communication: Effects on stakeholders' perceptions," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 407-421, February.
    10. Bikram Chatterjee & Monir Zaman Mir, 2008. "The current status of environmental reporting by Indian companies," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(6), pages 609-629, June.
    11. Charles Cho & Dennis Patten & Robin Roberts, 2006. "Corporate Political Strategy: An Examination of the Relation between Political Expenditures, Environmental Performance, and Environmental Disclosure," Journal of Business Ethics, Springer, vol. 67(2), pages 139-154, August.
    12. Le Luo, 2019. "The influence of institutional contexts on the relationship between voluntary carbon disclosure and carbon emission performance," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(2), pages 1235-1264, June.
    13. Shamima Haque & Craig Deegan, 2010. "Corporate Climate Change-Related Governance Practices and Related Disclosures: Evidence from Australia," Australian Accounting Review, CPA Australia, vol. 20(4), pages 317-333, December.
    14. Ilinitch, Anne Y. & Soderstrom, Naomi S. & E. Thomas, Tom, 1998. "Measuring corporate environmental performance," Journal of Accounting and Public Policy, Elsevier, vol. 17(4-5), pages 383-408.
    15. Philip Baird & Pinar Geylani & Jeffrey Roberts, 2012. "Corporate Social and Financial Performance Re-Examined: Industry Effects in a Linear Mixed Model Analysis," Journal of Business Ethics, Springer, vol. 109(3), pages 367-388, September.
    16. İbrahim Topal & Sima Nart & Cüneyt Akar & Alptekin Erkollar, 2020. "The effect of greenwashing on online consumer engagement: A comparative study in France, Germany, Turkey, and the United Kingdom," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 465-480, February.
    17. Luo, Le & Tang, Qingliang, 2014. "Does voluntary carbon disclosure reflect underlying carbon performance?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 10(3), pages 191-205.
    18. Cedric Dawkins & John Fraas, 2011. "Coming Clean: The Impact of Environmental Performance and Visibility on Corporate Climate Change Disclosure," Journal of Business Ethics, Springer, vol. 100(2), pages 303-322, May.
    19. Jeffrey Unerman & Jan Bebbington & Brendan O’dwyer, 2018. "Corporate reporting and accounting for externalities," Accounting and Business Research, Taylor & Francis Journals, vol. 48(5), pages 497-522, July.
    20. de Villiers, Charl & van Staden, Chris J., 2006. "Can less environmental disclosure have a legitimising effect? Evidence from Africa," Accounting, Organizations and Society, Elsevier, vol. 31(8), pages 763-781, November.
    21. Peter M. Clarkson & Michael B. Overell & Larelle Chapple, 2011. "Environmental Reporting and its Relation to Corporate Environmental Performance," Abacus, Accounting Foundation, University of Sydney, vol. 47(1), pages 27-60, March.
    22. Yue Li & Gordon D. Richardson & Daniel B. Thornton, 1997. "Corporate Disclosure of Environmental Liability Information: Theory and Evidence," Contemporary Accounting Research, John Wiley & Sons, vol. 14(3), pages 435-474, September.
    23. Freedman, Martin & Jaggi, Bikki, 2005. "Global warming, commitment to the Kyoto protocol, and accounting disclosures by the largest global public firms from polluting industries," The International Journal of Accounting, Elsevier, vol. 40(3), pages 215-232.
    24. Khaled Alsaifi & Marwa Elnahass & Aly Salama, 2020. "Carbon disclosure and financial performance: UK environmental policy," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 711-726, February.
    25. Al-Tuwaijri, Sulaiman A. & Christensen, Theodore E. & Hughes, K. II, 2004. "The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equations approach," Accounting, Organizations and Society, Elsevier, vol. 29(5-6), pages 447-471.
    26. Milton Friedman, 2007. "The Social Responsibility of Business Is to Increase Its Profits," Springer Books, in: Walther Ch Zimmerli & Markus Holzinger & Klaus Richter (ed.), Corporate Ethics and Corporate Governance, pages 173-178, Springer.
    27. Verrecchia, Robert E., 1983. "Discretionary disclosure," Journal of Accounting and Economics, Elsevier, vol. 5(1), pages 179-194, April.
    28. Healy, Paul M. & Palepu, Krishna G., 2001. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 405-440, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wei Wang & Dechao Ma & Fengzhi Wu & Mengxin Sun & Shuangqing Xu & Qiuyue Hua & Ziyuan Sun, 2023. "Exploring the Knowledge Structure and Hotspot Evolution of Greenwashing: A Visual Analysis Based on Bibliometrics," Sustainability, MDPI, vol. 15(3), pages 1-35, January.
    2. Rossana Mastrandrea & Rob ter Burg & Yuli Shan & Klaus Hubacek & Franco Ruzzenenti, 2022. "Scaling laws in global corporations as a benchmarking approach to assess environmental performance," Papers 2206.03148, arXiv.org, revised Jul 2023.
    3. Jeanne, Amar & Demaria, Samira & Rigot, Sandra, 2023. "What are the drivers of corporates' climate transparency? Evidence from the S&P 1200 index," Ecological Economics, Elsevier, vol. 213(C).
    4. Parvez Mia & Tarek Rana & Lutfa Tilat Ferdous, 2021. "Government Reform, Regulatory Change and Carbon Disclosure: Evidence from Australia," Sustainability, MDPI, vol. 13(23), pages 1-17, November.
    5. Yinglin Huang & Claude Francoeur & Stephen Brammer, 2022. "What drives and curbs brownwashing?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2518-2532, July.
    6. Maximilian Hettler & Lorenz Graf‐Vlachy, 2024. "Corporate scope 3 carbon emission reporting as an enabler of supply chain decarbonization: A systematic review and comprehensive research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 263-282, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Perera, Luckmika & Jubb, Christine & Gopalan, Sandeep, 2019. "A comparison of voluntary and mandated climate change-related disclosure," Journal of Contemporary Accounting and Economics, Elsevier, vol. 15(2), pages 243-266.
    2. My Hanh Doan & Remmer Sassen, 2020. "The relationship between environmental performance and environmental disclosure: A meta‐analysis," Journal of Industrial Ecology, Yale University, vol. 24(5), pages 1140-1157, October.
    3. Qian, Wei & Schaltegger, Stefan, 2017. "Revisiting carbon disclosure and performance: Legitimacy and management views," The British Accounting Review, Elsevier, vol. 49(4), pages 365-379.
    4. Linda Kusumaning Wedari & Amir Moradi‐Motlagh & Christine Jubb, 2023. "The moderating effect of innovation on the relationship between environmental and financial performance: Evidence from high emitters in Australia," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 654-672, January.
    5. Siddique, Md Abubakar & Akhtaruzzaman, Md & Rashid, Afzalur & Hammami, Helmi, 2021. "Carbon disclosure, carbon performance and financial performance: International evidence," International Review of Financial Analysis, Elsevier, vol. 75(C).
    6. Mahoney, Lois S. & Thorne, Linda & Cecil, Lianna & LaGore, William, 2013. "A research note on standalone corporate social responsibility reports: Signaling or greenwashing?," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 24(4), pages 350-359.
    7. Dong Ding & Bin Liu & Millicent Chang, 2023. "Carbon Emissions and TCFD Aligned Climate-Related Information Disclosures," Journal of Business Ethics, Springer, vol. 182(4), pages 967-1001, February.
    8. Liu, Yang Stephanie & Zhou, Xiaoyan & Yang, Jessica Hong & Hoepner, Andreas G.F. & Kakabadse, Nada, 2023. "Carbon emissions, carbon disclosure and organizational performance," International Review of Financial Analysis, Elsevier, vol. 90(C).
    9. Camélia Radu & Claude Francoeur, 2017. "Does Innovation Drive Environmental Disclosure? A New Insight into Sustainable Development," Business Strategy and the Environment, Wiley Blackwell, vol. 26(7), pages 893-911, November.
    10. Fan, Hanlu & Tang, Qingliang & Pan, Lipeng, 2021. "An international study of carbon information asymmetry and independent carbon assurance," The British Accounting Review, Elsevier, vol. 53(1).
    11. Le Luo & Qingliang Tang & Hanlu Fan & Jamie Ayers, 2023. "Corporate carbon assurance and the quality of carbon disclosure," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(1), pages 657-690, March.
    12. Clarkson, Peter M. & Li, Yue & Richardson, Gordon D. & Vasvari, Florin P., 2008. "Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 303-327.
    13. Grigoris Giannarakis & Eleni Zafeiriou & Nikolaos Sariannidis, 2017. "The Impact of Carbon Performance on Climate Change Disclosure," Business Strategy and the Environment, Wiley Blackwell, vol. 26(8), pages 1078-1094, December.
    14. Jiang, Yan & Luo, Le & Xu, JianFeng & Shao, XiaoRui, 2021. "The value relevance of corporate voluntary carbon disclosure: Evidence from the United States and BRIC countries," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(3).
    15. Omaima A.G. Hassan & Peter Romilly, 2018. "Relations between corporate economic performance, environmental disclosure and greenhouse gas emissions: New insights," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 893-909, November.
    16. Kentaro Azuma & Akira Higashida, 2024. "Climate change disclosure and evolving institutional investor salience: Roles of the Principles for Responsible Investment," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3669-3686, May.
    17. Charles H. Cho & Jonathan Maurice & Emmanuelle Nègre & Marie-Anne Verdier, 2016. "Is environmental disclosure good for the environment? A meta-analysis and research agenda," Post-Print halshs-01369422, HAL.
    18. Dwi Ratmono & Darsono Darsono & Selviana Selviana, 2021. "Effect of Carbon Performance, Company Characteristics and Environmental Performance on Carbon Emission Disclosure: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 101-109.
    19. María Luisa Pajuelo Moreno & Teresa Duarte-Atoche, 2019. "Relationship between Sustainable Disclosure and Performance—An Extension of Ullmann’s Model," Sustainability, MDPI, vol. 11(16), pages 1-33, August.
    20. Aerts, Walter & Cormier, Denis & Magnan, Michel, 2008. "Corporate environmental disclosure, financial markets and the media: An international perspective," Ecological Economics, Elsevier, vol. 64(3), pages 643-659, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:30:y:2021:i:8:p:3721-3739. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.