The state of climate change-related risk disclosures and the way forward

Herbohn, K.F., Clarkson, P.M. and Wallis, M. (forthcoming 2022). The State of Climate Change- Related Risk Disclosures and the Way Forward in Adams, C A (editor), Handbook of Accounting and Sustainability, Edward Elgar Publishing Ltd.

30 Pages Posted: 8 Nov 2021 Last revised: 10 Nov 2021

See all articles by Kathleen Herbohn

Kathleen Herbohn

University of Queensland - Business School

Peter Clarkson

University of Queensland - Business School; Simon Fraser University (SFU) - Beedie School of Business; Financial Research Network (FIRN)

Mark Wallis

The University of Queensland

Date Written: September 20, 2021

Abstract

Research suggests that mandated emissions disclosure incentivises firms to reduce emissions by increasing anticipated regulatory and reputational threats, and enables firms to benchmark their own performance. Research also suggests that broader voluntary climate change-related disclosures are valued in capital markets, providing insights into physical and transition risk, which guide more efficient capital allocations. One course of action for regulators is to mandate a broad range of climate-related disclosures to better inform stakeholders. An alternative is for regulators to rely on moral suasion to pressure firms to report on their climate performance. The likelihood of adoption of these alternatives is discussed.

Keywords: GHG emissions disclosure; climate change risk disclosure; TCFD; mandated versus voluntary disclosure

JEL Classification: M42,M48

Suggested Citation

Herbohn, Kath and Clarkson, Peter and Wallis, Mark, The state of climate change-related risk disclosures and the way forward (September 20, 2021). Herbohn, K.F., Clarkson, P.M. and Wallis, M. (forthcoming 2022). The State of Climate Change- Related Risk Disclosures and the Way Forward in Adams, C A (editor), Handbook of Accounting and Sustainability, Edward Elgar Publishing Ltd. , Available at SSRN: https://ssrn.com/abstract=3958452 or http://dx.doi.org/10.2139/ssrn.3958452

Kath Herbohn (Contact Author)

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Peter Clarkson

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Simon Fraser University (SFU) - Beedie School of Business ( email )

8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Mark Wallis

The University of Queensland ( email )

Australia

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