Mandatory Corporate Carbon Disclosure: Evidence from a Natural Experiment

56 Pages Posted: 13 Aug 2019 Last revised: 31 Mar 2020

See all articles by Valentin Jouvenot

Valentin Jouvenot

University of Geneva - Geneva Finance Research Institute (GFRI)

Philipp Krueger

University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute

Date Written: August 8, 2019

Abstract

We study the introduction of a unique law in the United Kingdom that mandates publicly listed firms to disclose their greenhouse gas emissions in a standardized way. Using a difference-in-differences framework, we provide evidence that firms respond to the disclosure regulation by reducing their emissions. Examining why firms reduce their emissions, we show that a mix of institutional investor, general stakeholder, and competitive pressure is likely to explain the reduction. We also study the financial effects of the regulation and find that firms disclosing low (high) emissions relative to industry peers exhibit positive (negative) abnormal returns.

Keywords: mandatory disclosure regulation, greenhouse gas emissions, climate change mitigation

Suggested Citation

Jouvenot, Valentin and Krueger, Philipp, Mandatory Corporate Carbon Disclosure: Evidence from a Natural Experiment (August 8, 2019). Available at SSRN: https://ssrn.com/abstract=3434490 or http://dx.doi.org/10.2139/ssrn.3434490

Valentin Jouvenot

University of Geneva - Geneva Finance Research Institute (GFRI) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, Geneva 1211
Switzerland

Philipp Krueger (Contact Author)

University of Geneva - Geneva Finance Research Institute (GFRI) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, Geneva 1211
Switzerland

Swiss Finance Institute ( email )

Switzerland

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