Voluntary Climate Disclosures: A Tale of Two Venues

62 Pages Posted: 3 Oct 2023

See all articles by Sanjay Banerjee

Sanjay Banerjee

University of Alberta - Department of Accounting, Operations & Information Systems

Ailin Chen

University of Alberta

Minjia Li

Alberta School of Business, University of Alberta

Vikas Mehrotra

University of Alberta - Department of Finance and Statistical Analysis

Rajesh Vijayaraghavan

University of British Columbia (UBC) - Sauder School of Business

Date Written: September 19, 2023

Abstract

We examine the determinants and consequences of firms’ choice between two disclosure venues, corporate social responsibility (CSR) reports and the Carbon Disclosure Project (CDP), for voluntary climate disclosure. We find that a firm’s CDP disclosure is positively associated with its prior CSR disclosure, but not vice versa. Firms with prior CSR disclosure are less likely to disclose to the CDP when they have more climate-related shareholder resolutions, greater emissions and tighter financial constraints. Following their first-time CDP disclosure, firms experience higher liquidity, ESG ratings, analyst coverage, and lower emissions - although these findings apply only to firms without prior CSR disclosure. Overall, our results point to a hitherto overlooked strategic angle in firms’ choice of venues for their voluntary climate disclosures.

Keywords: Climate-related disclosure, disclosure venue, CDP, sustainability report, shareholder activism, Big 3

JEL Classification: G11, Q54, M41

Suggested Citation

Banerjee, Sanjay and Chen, Ailin and Li, Minjia and Mehrotra, Vikas and Vijayaraghavan, Rajesh, Voluntary Climate Disclosures: A Tale of Two Venues (September 19, 2023). Available at SSRN: https://ssrn.com/abstract=4575733 or http://dx.doi.org/10.2139/ssrn.4575733

Sanjay Banerjee (Contact Author)

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada

Ailin Chen

University of Alberta

Minjia Li

Alberta School of Business, University of Alberta ( email )

11211 Saskatchewan Dr NW
Edmonton, Alberta T6G 2R6
Canada

Vikas Mehrotra

University of Alberta - Department of Finance and Statistical Analysis ( email )

School of Business
University of Alberta
Edmonton, Alberta T6G 2R6
Canada
780-492-2976 (Phone)
780-492-3325 (Fax)

Rajesh Vijayaraghavan

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

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