Corporate Responses in an Emerging Climate Regime: The Institutionalization and Commensuration of Carbon Disclosure
European Accounting Review, Vol. 17, No. 4, pp. 719-745, 2008
35 Pages Posted: 19 Sep 2008 Last revised: 26 May 2014
Date Written: September 15, 2008
This paper examines corporate responses to climate change in relation to the development of reporting mechanisms for greenhouse gases, more specifically carbon disclosure. It first presents some background and context on the evolution of carbon trading and disclosure, and then develops a conceptual framework using theories of global governance, institutional theory, and commensuration to understand the role of carbon disclosure in the emerging climate regime. Subsequently a closer look is taken at carbon disclosure and reporting mechanisms, with a particular focus on the Carbon Disclosure Project (CDP). Our analysis of responses shows that CDP has been successfully using institutional investors to urge firms to disclose extensive information about their climate change activities. However, although response rates in terms of numbers of disclosing firms are impressive and growing, neither the level of carbon disclosure that CDP promotes nor the more detailed carbon accounting provide information that is particularly valuable for investors, NGOs, or policymakers at this stage. As a project of commensuration, carbon disclosure has achieved some progress in technical terms, but much less with regard to the cognitive and value dimensions.
Keywords: Carbon, climate change, disclosure, multinationals, investors, business responses, greenhouse gases
JEL Classification: D21, F23, G38, M14, M40, M41, Q43
Suggested Citation: Suggested Citation