The Impact of Carbon Disclosure Mandates on Emissions and Financial Operating Performance
Sebastian Schwenen and
No 1875, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research
We examine whether a disclosure mandate for greenhouse gas emissions creates stakeholder pressure for firms to subsequently reduce their emissions. For UK-incorporated listed firms such a mandate was adopted in 2013. Using a difference-in-differences design, we find that firms affected by the mandate reduced their emissions – depending on the specification – by an incremental 14-18% relative to a control group. This reduction was accompanied by an average 9% increase in production costs. At the same time, the treated firms were able to increase their sales by an almost compensating amount. Taken together, our findings provide no indication that the disclosure requirement led to a significant deterioration in the financial operating performance of the treated firms, despite the significant carbon footprint reduction following the disclosure mandate.
Keywords: Disclosure of non-financial information; mandatory disclosure; greenhouse gas emissions; real effects (search for similar items in EconPapers)
JEL-codes: Q28 Q40 M41 M48 (search for similar items in EconPapers)
Pages: 41 p.
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp1875
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