Voluntary carbon transparency

A substitute for or complement to financial transparency?

Le Luo, Hongjun Wu

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

We analyze the relationship between financial transparency and carbon transparency based on the ethical and opportunistic perspectives. Our sample comprises 10,341 firm-year observations from firms in 55 countries or regions in the CDP (previously the Carbon Disclosure Project) during the period 2003–2015. We measure carbon transparency based on both managerial propensity to publicly disclose carbon information and the level and comprehensiveness of the voluntary carbon disclosure. We operationalize financial transparency based on firms’ earnings management (EM). We find that our carbon transparency proxies are negatively associated with EM. These results are consistent with the ethical perspective, which suggests that carbon transparency complements financial transparency rather than substitutes for it. Furthermore, we find that the complementary relationship between carbon transparency and financial transparency is dependent on a country’s stakeholder orientation, collectivism in the national culture, the presence of an emissions trading scheme, and regulatory governance.

Original languageEnglish
Pages (from-to)65-88
Number of pages24
JournalJournal of International Accounting Research
Volume18
Issue number2
DOIs
Publication statusPublished - 1 Jun 2019
Externally publishedYes

Keywords

  • Carbon disclosure
  • Carbon transparency
  • Earnings management
  • Ethical theory
  • Financial transparency
  • Opportunistic theory

Fingerprint Dive into the research topics of 'Voluntary carbon transparency: A substitute for or complement to financial transparency?'. Together they form a unique fingerprint.

Cite this