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Under pressure: The link between mandatory climate reporting and firms' carbon performance

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  • Bauckloh, Michael Tobias
  • Klein, Christian
  • Pioch, Thomas
  • Schiemann, Frank

Abstract

We examine whether mandatory climate reporting leads to changes in firms' carbon emissions. Using propensity score matching and a difference-in-differences design, we assess the effects of the Greenhouse Gas Reporting Program (GHGRP), introduced by the Environmental Protection Agency (EPA) in 2010, on the carbon performance defined as carbon intensity and absolute carbon emissions of affected firms. Institutional and legitimacy theory serve as theoretical underpinnings to investigate the degree to which firms comply with their ethical obligations. We find that firms affected by the GHGRP improve their carbon performance significantly more than unaffected firms after the introduction of the GHGRP, but not their absolute carbon emissions. The results are robust to changes in the difference-in-differences design and the matching sample.Overall, our study add to research on climate-related disclosure regulation by assessing the GHGRP's suitability as a regulatory measure to limit firms' negative impacts on our climate.

Suggested Citation

  • Bauckloh, Michael Tobias & Klein, Christian & Pioch, Thomas & Schiemann, Frank, 2022. "Under pressure: The link between mandatory climate reporting and firms' carbon performance," CFR Working Papers 22-01, University of Cologne, Centre for Financial Research (CFR).
    • Handle: RePEc:zbw:cfrwps:2201
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    Cited by:

    1. Li, Ruonan & Lu, Feng & Xu, Jun & Chen, Kai & Zhao, Xiaoli, 2023. "Effect of carbon information disclosure with consistent evaluation standards: An empirical study about carbon efficiency label in Huzhou China," Energy Policy, Elsevier, vol. 181(C).
    2. Fahad Khalid & Juncheng Sun & Jiawei Guo & Mohit Srivastava, 2024. "Green corporate image: Assessing the effects of climate change management practices on corporate reputation," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 1786-1801, May.
    3. Sorabh Tomar, 2023. "Greenhouse Gas Disclosure and Emissions Benchmarking," Journal of Accounting Research, Wiley Blackwell, vol. 61(2), pages 451-492, May.
    4. 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.

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    carbon performance; mandatory reporting; institutional theory;
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