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Institutional dual ownership and voluntary greenhouse gas emission disclosure

Author

Listed:
  • Barg, Johannes A.
  • Drobetz, Wolfgang
  • El Ghoul, Sadok
  • Guedhami, Omrane
  • Schröder, Henning

Abstract

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 improvements in voluntary GHG emission disclosure are motivated by climate-conscious and risk-related considerations. The positive effect of institutional dual ownership is more pronounced in firms facing significant environmental risks, where disclosure enables clearer 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 enhanced monitoring capacity through gathering information from both their public equity and private debt holdings. Consistent with our risk-based explanation, voluntary GHG emission disclosure reduces the cost of equity and increases firm valuation in firms with higher dual ownership.

Suggested Citation

  • Barg, Johannes A. & Drobetz, Wolfgang & El Ghoul, Sadok & Guedhami, Omrane & Schröder, Henning, 2024. "Institutional dual ownership and voluntary greenhouse gas emission disclosure," Journal of Corporate Finance, Elsevier, vol. 89(C).
  • Handle: RePEc:eee:corfin:v:89:y:2024:i:c:s0929119924001330
    DOI: 10.1016/j.jcorpfin.2024.102671
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    More about this item

    Keywords

    Climate change; Greenhouse gas emission disclosure; Institutional investors; Dual holders; Climate finance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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