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The Real Effects of Mandatory CSR Disclosure on Emissions: Evidence from the Greenhouse Gas Reporting Program

Author

Listed:
  • Lavender Yang
  • Nicholas Z. Muller
  • Pierre Jinghong Liang

Abstract

We examine the real effects of the Greenhouse Gas Reporting Program (GHGRP) on electric power plants in the United States. Starting in 2010, the GHGRP requires both the reporting of greenhouse gas emissions by facilities emitting more than 25,000 metric tons of carbon dioxide per year to the Environmental Protection Agency and the public dissemination of the reported data in a comprehensive and accessible manner. Using a difference-in-difference research design, we find that power plants that are subject to the GHGRP reduced carbon dioxide emission rates by 7%. The effect is stronger for plants owned by publicly traded firms. We detect evidence of strategic behavior by firms that own both GHGRP plants and non-GHGRP plants. Such firms strategically reallocate emissions between plants to reduce GHGRP-disclosed emissions. We interpret this as evidence that the program is costly to the affected firms. Our results offer new evidence that public or shareholder pressure is a primary channel through which mandatory Corporate Social Responsibility (CSR) reporting programs affect firm behavior.

Suggested Citation

  • Lavender Yang & Nicholas Z. Muller & Pierre Jinghong Liang, 2021. "The Real Effects of Mandatory CSR Disclosure on Emissions: Evidence from the Greenhouse Gas Reporting Program," NBER Working Papers 28984, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28984
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    Cited by:

    1. Xiao Lin & Kyeonghee Kim & Anastasia Ivantsova, 2023. "Insights from the mandatory insurer climate risk disclosure survey in the United States," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 26(1), pages 107-118, March.
    2. Cohen, Shira & Kadach, Igor & Ormazabal, Gaizka, 2023. "Institutional investors, climate disclosure, and carbon emissions," Journal of Accounting and Economics, Elsevier, vol. 76(2).
    3. Vazquez, Antonio B. & Martinez, Sofia, 2022. "Mandatory ESG Reporting and Corporate Performance," Misum Working Paper Series 2022-5, Stockholm School of Economics, Mistra Center for Sustainable Markets (Misum), revised 30 Jan 2023.
    4. Shangen Li, 2024. "Optimal Design of Climate Disclosure Policies: Transparency versus Externality," Papers 2402.11961, arXiv.org, revised Aug 2024.
    5. Earnhart, Dietrich & Germeshausen, Robert & von Graevenitz, Kathrine, 2022. "Effects of information-based regulation on financial outcomes: Evidence from the European Union's public emission registry," ZEW Discussion Papers 22-015, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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