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Disclosure of climate risk information by the world’s largest companies

Author

Listed:
  • Daniel Kouloukoui

    (Federal University of Bahia (UFBA))

  • Sônia Maria da Silva Gomes

    (Federal University of Bahia (UFBA))

  • Marcia Mara de Oliveira Marinho

    (Federal University of Bahia (UFBA))

  • Ednildo Andrade Torres

    (Federal University of Bahia (UFBA))

  • Asher Kiperstok

    (Federal University of Bahia (UFBA))

  • Pieter de Jong

    (Federal University of Bahia (UFBA))

Abstract

The risks related to global climate change are seen as threats to companies, taking into consideration their impact on the return on investment. In order to mitigate climate risk and introduce new opportunities to financiers, companies need to identify, manage, and report climate risks. The purpose of this paper is to investigate the climate risks disclosed by the 100 largest companies in the world, according to the Bloomberg and Price Waterhouse Coopers (PwC 2015) classification, and identify some characteristics of these companies that explain the disclosure level of such information. Preliminary results revealed that of the companies investigated, 14% did not disclose any climate risk information in the Carbon Disclosure Program (CDP) report. Also, from the companies that disclosed information according to the Global Reporting Initiative (GRI), 9.9% did not provide information regarding policies, actions, and strategies for mitigating the risks related to climate change. The results shown by the content analysis suggested that, in general, there is still a low level of disclosure about climate risks by these companies. The final results through econometric instruments and statistical tests indicate that the size of the company or the fact that corporations are from developed countries do not necessarily explain the level of information disclosed. However, the activity sector, the continent, and the efficiency of the Board of Directors are factors that strongly explain the level of climate risk disclosure. We conclude that more effort is needed to encourage an engaging attitude from corporations to develop actions, policies, and strategies to mitigate climate change risks and threats. In addition, the world’s largest companies should make a greater investment in climate risk disclosure.

Suggested Citation

  • Daniel Kouloukoui & Sônia Maria da Silva Gomes & Marcia Mara de Oliveira Marinho & Ednildo Andrade Torres & Asher Kiperstok & Pieter de Jong, 2018. "Disclosure of climate risk information by the world’s largest companies," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 23(8), pages 1251-1279, December.
    • Handle: RePEc:spr:masfgc:v:23:y:2018:i:8:d:10.1007_s11027-018-9783-2
    DOI: 10.1007/s11027-018-9783-2
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    Cited by:

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    2. Kanwalroop K. Dhanda & Joseph Sarkis & Dileep G. Dhavale, 2022. "Institutional and stakeholder effects on carbon mitigation strategies," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 782-795, March.
    3. Daniel Kouloukoui & Marcia Mara de Oliveira Marinho & Sônia Maria da Silva Gomes & Pieter de Jong & Asher Kiperstok & Ednildo Andrade Torres, 2020. "The impact of the board of directors on business climate change management: case of Brazilian companies," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(1), pages 127-147, January.
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