Absolute emissions targets and voluntary carbon disclosure: an international empirical survey

Purpose - This paper aims to analyze the influence of organizational and contextual factors on companies’ decisions to set absolute emissions targets and science-based targets (SBTs). Design/methodology/approach - This study uses a sample of 23,166 observations across 69 countries from 2016 to 2020 to analyze the likelihood of firms to establish absolute emissions targets and SBTs. Findings - The results show that firm size, governance, climate-related regulation and moral acceptance in the country in question positively influence companies’ decisions on these matters. Furthermore, while profitability has a positive influence on the participation of companies in the SBT initiative (SBTi), both the financial risk involved and sector emissions intensity can discourage companies from participating in the SBTi or from establishing absolute emissions targets. Practical implications - This study may allow regulators and policymakers to encourage carbon information disclosure with a greater focus on aspects that specifically contribute to evaluating ways of promoting effective behavior on the part of companies in the fight against climate change. Social implications - The results of this study serve to support the demands of civil society, as well as to guide regulators in the design of measures in the fight against climate change and steer the decision-making of investors in moving toward a low carbon economy. Originality/value - To the best of the authors’ knowledge, this study is the first to examine whether organizational and contextual factors affect companies’ propensity to set absolute emissions targets and SBTs.