An Investigation of Voluntary Corporate Greenhouse Gas Emissions Reporting in a Market Governance System: Australian Evidence

Posted: 20 Nov 2011 Last revised: 29 Oct 2013

See all articles by Michaela Rankin

Michaela Rankin

Monash University

Carolyn A. Windsor

affiliation not provided to SSRN

Dina Wahyuni

Swinburne University of Technology

Date Written: November 1, 2011

Abstract

Purpose: Institutional governance theory is used to explain voluntary corporate greenhouse gas (GHG) reporting in the context of a market governance system in the absence of climate change public policy. This paper seeks to hypothesise that GHG reporting is related to internal organisation systems, external privately promulgated guidance and EU ETS trading.

Design/Method: A two-stage approach is used. The initial model examines whether firms' GHG disclosures are associated with internal organisations factors: environmental management system (EMS), corporate governance quality and environmental management committees as well as external private guidance provided by the Global Reporting Guidance (GRI) and the Carbon Disclosure Project (CDP) for 187 ASX300 firms. EU ETS trading is also included. Determinants of the extent and credibility of GHG disclosure is examined in the second stage where an index is constructed from the GHG reporting standard ISO 14064-1 items for a sub-sample of 80 disclosing firms as the dependent variable.

Findings: Firms that voluntarily disclose GHGs have EMS (uncertified or certified), higher corporate governance quality and publicly report to the CDP, tend to be large and in the energy and mining and in industrial sectors. The credibility and extent of disclosures are related to the existence of a certified EMS, public reporting to the CDP, and use of the GRI. Firms that disclose more credible information are more likely to be large and in the energy and mining, industrial and services sectors.

Originality/Value: The paper shows that some proactive but pragmatic Australian firms are disclosing their GHGs voluntarily for competitive advantage in the current market governance system in the absence of public policy.

The summary video can be viewed on: Youtube

Keywords: GHG emissions disclosure, Environmental Management Systems, Governance, Carbon

Suggested Citation

Rankin, Michaela and Windsor, Carolyn A. and Wahyuni, Dina, An Investigation of Voluntary Corporate Greenhouse Gas Emissions Reporting in a Market Governance System: Australian Evidence (November 1, 2011). Accounting, Auditing and Accountability, Vol. 24, No. 8, 2011, Available at SSRN: https://ssrn.com/abstract=1961820

Michaela Rankin

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Carolyn A. Windsor

affiliation not provided to SSRN ( email )

Dina Wahyuni (Contact Author)

Swinburne University of Technology ( email )

PO Box 218
Hawthorn, VIC 3122
Australia

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