Does the market value greenhouse gas emissions? Evidence from multi-country firm data

Bobae Choi, Le Luo*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

78 Citations (Scopus)
38 Downloads (Pure)


Despite increasing global attention on corporate carbon emissions, few studies have examined the value relevance of carbon emission information in the international context. This paper examines whether carbon emission information voluntarily disclosed by a firm affects its market value. After controlling for a firm's likelihood to provide voluntary carbon disclosures, we find that the level of carbon emissions is negatively related to firm value. This negative impact is more prominent for firms in countries that have a national carbon emission trading scheme and stringent environmental regulations. Furthermore, corporate governance is found to reduce the negative value effect of carbon emissions, indicating that shareholders have favorable perceptions regarding the carbon management ability of firms with good corporate governance. Cultural contexts such as uncertainty avoidance and long-term orientation also affect the value effect of risks and future liabilities associated with carbon emissions. We find that the value-decreasing effect of carbon emissions is weaker in countries characterized by high uncertainty avoidance and long-term orientations.

Original languageEnglish
Article number100909
Number of pages24
JournalBritish Accounting Review
Issue number1
Early online date16 Mar 2020
Publication statusPublished - Jan 2021


  • Business and the environment
  • Carbon emission
  • Carbon regulation
  • ETS
  • Market value
  • National culture
  • Sustainability


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