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The value relevance of carbon emissions information from Australian-listed companies

Author

Listed:
  • Bobae Choi

    (The University of Newcastle, Newcastle, NSW, Australia)

  • Le Luo

    (Macquarie University, Sydney, NSW, Australia)

  • Pramila Shrestha

    (The University of Newcastle, Newcastle, NSW, Australia)

Abstract

Using data on carbon emissions reported by Australian companies from 2009 to 2015, we examine the effect of carbon emissions on firm value. We investigate how the introduction of an Australian emissions pricing scheme, the Clean Energy Bill, affects this relationship. Results show that the level of direct emissions is negatively associated with a firm’s market value. The negative effect becomes stronger during the period when the Clean Energy Bill became effective. When firms are separated according to whether they provide voluntary carbon information in addition to their mandatory disclosures, negative effects of direct emissions are found in the group with low disclosure scores and in the group with poor carbon management performance. Overall, the results indicate that the market penalizes firms based on their direct carbon emissions and that this penalty is imposed only on firms that have low disclosure scores or poor carbon management performance. JEL Classification: M48, G32

Suggested Citation

  • Bobae Choi & Le Luo & Pramila Shrestha, 2021. "The value relevance of carbon emissions information from Australian-listed companies," Australian Journal of Management, Australian School of Business, vol. 46(1), pages 3-23, February.
    • Handle: RePEc:sae:ausman:v:46:y:2021:i:1:p:3-23
    DOI: 10.1177/0312896220918642
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    References listed on IDEAS

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    Cited by:

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    3. Le Luo & Qingliang Tang, 2022. "National culture and corporate carbon performance," Australian Journal of Management, Australian School of Business, vol. 47(3), pages 503-538, August.
    4. Li, Jingduan & Peng, Xuhui & Zhang, Huan, 2025. "The role of science-based targets on carbon mitigation: Addressing the tension between net zero anxiety and economic growth," The British Accounting Review, Elsevier, vol. 57(2).
    5. Luo, Le & Zhang, Junru & Zheng, Chen, 2025. "Carbon management ability and climate risk exposure: An international investigation," Journal of Banking & Finance, Elsevier, vol. 173(C).
    6. Ingrid Millar & Peter Clarkson & Kathleen Herbohn, 2025. "The Value Relevance of a Firm's Carbon Risk Profile," Abacus, Accounting Foundation, University of Sydney, vol. 61(3), pages 555-601, September.
    7. Rina Datt & Le Luo & Reuben Segara, 2025. "Voluntary carbon assurance and the cost of equity capital: International evidence," Australian Journal of Management, Australian School of Business, vol. 50(4), pages 1129-1165, November.
    8. Jiang, Yan & Luo, Le & Tsang, Albert & Zhang, Yueheng, 2025. "Carbon emission trading scheme and carbon performance: The role of carbon management system," The British Accounting Review, Elsevier, vol. 57(3).

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    JEL classification:

    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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