A global study of climate uncertainty and carbon assurance

Le Luo and Junru Zhang

The British Accounting Review, 2025, vol. 57, issue 4

Abstract: Measurement, verification, and reporting of carbon emissions is essential for climate management. However, research on carbon assurance is limited. To address this gap, we investigate the association between climate uncertainty and voluntary carbon assurance. We conceptualize and operationalize four dimensions of micro-level climate uncertainty: innovation, management and performance, supply chain, and managerial perception uncertainty. We find that all four proxies of climate uncertainty are positively associated with the adoption of voluntary carbon assurance and the positive associations are moderated by a country-level environmental, social, and governance reporting mandate and the industry. Finally, we document that voluntary carbon assurance impacts the valuation of certain dimensions of climate uncertainty. Overall, our study is among the first to document empirical evidence of the nature, characteristics, and dimensions of climate uncertainty and its impact on firms’ carbon assurance. The knowledge will help companies strengthen their capacity to manage the green transition toward carbon neutrality.

Keywords: Climate uncertainty; Innovation; Supply chain; Management and performance; Managerial perception; Climate policy; Carbon assurance; International; CDP; Firm value (search for similar items in EconPapers)
JEL-codes: G32 M41 Q54 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:57:y:2025:i:4:s0890838924001896

DOI: 10.1016/j.bar.2024.101425

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