Emissions restatements after the SEC's request for public input on climate-related disclosures: Evidence from carbon disclosure project filings

This paper analyzes firms' restatements of their Scope 1 emission numbers after the Securities and Exchange Commission's request for public input on climate-related disclosure in March 2021. Using data from the Carbon Disclosure Project, we find a marked increase in the frequency and magnitude of restatements by U.S. public firms, both relative to their previous restatement levels and to those of private firms not subject to SEC oversight. Firms with independently assured emission data, board-level oversight of climate issues, high transition risk, and high institutional ownership restate less upwards but not downwards. Firms with upward revisions in response to the SEC's initiative increase investments in emission-reduction projects. The results are consistent with widespread weaknesses in firms' carbon reporting infrastructures and strategic motives to underreport. They have important implications for regulators, investors, and standard setters by highlighting the need for robust carbon reporting, and the critical role of assurance of sustainability disclosures.