Download This PaperGreenhouse Gas Disclosure and Emissions Benchmarking
SMU Cox School of Business Research Paper No. 19-17
European Corporate Governance Institute – Finance Working Paper No. 818/2022
67 Pages Posted: 2 Oct 2019 Last revised: 17 Oct 2022
Date Written: August 3, 2022
Abstract
This study examines the effects of the US Greenhouse Gas (GHG) Reporting Program, which requires thousands of industrial facilities to measure and report their GHG emissions. It shows that facilities reduce their GHG emissions by 7.9% following the disclosure of emissions data. The evidence indicates that benchmarking—whereby facilities use the disclosures of their peers to assess their own relative GHG performance— spurs emissions reductions. Firms’ concerns about future legislation appear to motivate this behavior. Lastly, I find no significant evidence of emissions reductions due solely to the measurement and (nonpublic) reporting of emissions to the regulator; in this setting, public disclosure is important for generating real effects.
Keywords: Disclosure; Transparency; Environmental, Social and Governance; ESG; Climate Change; Benchmarking; Peer Effects; Real Effects
JEL Classification: D22; D83; K32; L11; L21; L51; M41; M48; Q54; Q58
Suggested Citation: Suggested Citation
