Corporate Incentives to Disclose Carbon Information: Evidence from the CDP Global 500 Report


  • We thank Bobby Banerjee, Terry Sloan, Gabriel Donleavy, Phil Ross, Anne Abraham, and participants of the World Accounting Frontiers Series 2nd International Conference in the University of Western Sydney for their useful comments. We also thank Garry Tibbits and Charlie Koh for their editorial assistance. Particularly, insightful suggestions from Richard Levich (the Editor) and the anonymous reviewers are highly appreciated. Qingliang Tang and Yi-Chen Lan gratefully acknowledge the financial support for the study from School of Business, University of Western Sydney.


We investigate how the Global 500 companies respond to the challenge of climate change with regard to their carbon disclosure strategies. This paper is motivated by a growing body of research that examines the role of large companies in carbon disclosure responsibility and practices. We consider the impact of social, financial market, economic, regulatory, and institutional factors on the motivation to voluntarily participate in the 2009 Carbon Disclosure Project. We find that economic pressure is significantly associated with the decision. That is, companies facing direct economic consequence are more likely to disclose. Companies in greenhouse gas (GHG) intensive sectors show the same tendency. In addition, big companies have a higher propensity for disclosing, suggesting that social pressure plays an important role. We also provide possible explanations as to why a large proportion of our sample firms refuse to disclose. Furthermore, our results suggest that the proxies for information needs of investors are not associated with a higher propensity to disclose the amount of their emission footprints. In sum, it appears that the major driving force for climate change disclosure comes from the general public and government rather than from the other major stakeholders such as shareholders and debtholders. Our results are robust after controlling for other influences.