The impact of carbon disclosure mandates on emissions and financial operating performance

Benedikt Downar, Jürgen Ernstberger, Stefan Reichelstein, Sebastian Schwenen () and Aleksandar Zaklan ()

No 20-038, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: 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: disclosureof non-financial information; mandatory disclosure; greenhouse gas emissions; real effects (search for similar items in EconPapers)
JEL-codes: M41 M48 Q28 Q40 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cfn, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The impact of carbon disclosure mandates on emissions and financial operating performance (2021)
Journal Article: The impact of carbon disclosure mandates on emissions and financial operating performance (2021)
Working Paper: The Impact of Carbon Disclosure Mandates on Emissions and Financial Operating Performance (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:20038

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