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An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system: Australian evidence

Author

Listed:
  • Michaela Rankin
  • Carolyn Windsor
  • Dina Wahyuni

Abstract

Purpose - Institutional governance theory is used to explain voluntary corporate greenhouse gas (GHG) reporting in the context of a market governance system in the absence of climate change public policy. This paper seeks to hypothesise that GHG reporting is related to internal organisation systems, external privately promulgated guidance and EU ETS trading. Design/methodology/approach - A two-stage approach is used. The initial model examines whether firms' GHG disclosures are associated with internal organisation systems factors: environmental management systems (EMS), corporate governance quality and environmental management committees as well as external private guidance provided by the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP) for 187 ASX 300 firms. EU ETS trading is also included. Determinants of the extent and credibility of GHG disclosure is examined in the second stage where an index constructed from the GHG reporting standard “ISO 14064-1” items for a sub-sample of 80 disclosing firms as the dependent variable. Findings - Firms that voluntarily disclose GHGs have EMSs (uncertified and certified), higher corporate governance quality and publicly report to the CDP, tend to be large and in the energy and mining and industrial sectors. The credibility and extent of disclosures are related to the existence of a certified EMS, public reporting to the CDP, and use of the GRI. Firms that disclose more credible information are more likely to be large and in the energy and mining, industrial and services sectors. Originality/value - The paper shows that some proactive but pragmatic Australian firms are disclosing their GHGs voluntarily for competitive advantage in the current market governance system in the absence of public policy.

Suggested Citation

  • Michaela Rankin & Carolyn Windsor & Dina Wahyuni, 2011. "An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system: Australian evidence," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 24(8), pages 1037-1070, October.
  • Handle: RePEc:eme:aaajpp:v:24:y:2011:i:8:p:1037-1070
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Talbot, David & Boiral, Olivier, 2013. "Can we trust corporates GHG inventories? An investigation among Canada's large final emitters," Energy Policy, Elsevier, vol. 63(C), pages 1075-1085.
    2. Markus J. Milne & Suzana Grubnic, 2011. "Climate change accounting research: keeping it interesting and different," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 24(8), pages 948-977, October.
    3. Nath, Prithwiraj & Ramanathan, Ramakrishnan, 2016. "Environmental management practices, environmental technology portfolio, and environmental commitment: A content analytic approach for UK manufacturing firms," International Journal of Production Economics, Elsevier, vol. 171(P3), pages 427-437.
    4. Karen Benson & Peter M Clarkson & Tom Smith & Irene Tutticci, 2015. "A review of accounting research in the Asia Pacific region," Australian Journal of Management, Australian School of Business, vol. 40(1), pages 36-88, February.
    5. Yuchen Shen & Mohammad Tazul Islam & Michiyuki Yagi & Katsuhiko Kokubu, 2015. "How do firms' climate-related management and strategy affect climate change risks and opportunities awareness?," Discussion Papers 2015-26, Kobe University, Graduate School of Business Administration.
    6. Gary Peters & Andrea Romi, 2014. "Does the Voluntary Adoption of Corporate Governance Mechanisms Improve Environmental Risk Disclosures? Evidence from Greenhouse Gas Emission Accounting," Journal of Business Ethics, Springer, pages 637-666.
    7. Breeda Comyns, 2016. "Determinants of GHG Reporting: An Analysis of Global Oil and Gas Companies," Journal of Business Ethics, Springer, pages 349-369.
    8. repec:kap:jbuset:v:147:y:2018:i:2:d:10.1007_s10551-015-2979-4 is not listed on IDEAS
    9. Hajnalka Ván, 2012. "Environmental Accounting – A New Challenge for the Accounting System," Public Finance Quarterly, State Audit Office of Hungary, vol. 57(4), pages 437-452.
    10. Florence Depoers & Thomas Jeanjean & Tiphaine Jérôme, 2016. "Voluntary Disclosure of Greenhouse Gas Emissions: Contrasting the Carbon Disclosure Project and Corporate Reports," Journal of Business Ethics, Springer, pages 445-461.
    11. Mohammad Nurunnabi, 2016. "Who cares about climate change reporting in developing countries? The market response to, and corporate accountability for, climate change in Bangladesh," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, pages 157-186.
    12. Bowen Zhou & Michiyuki Yagi & Katsuhiko Kokubu, 2015. "An empirical examination of how the corporate governance and strategy affect GHG emissions efficiency," Discussion Papers 2015-27, Kobe University, Graduate School of Business Administration.
    13. David Talbot & Olivier Boiral, 2015. "Strategies for Climate Change and Impression Management: A Case Study Among Canada’s Large Industrial Emitters," Journal of Business Ethics, Springer, pages 329-346.

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