Online from: 1988
Subject Area: Accounting and Finance
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|Title:||An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system: Australian evidence|
|Author(s):||Michaela Rankin, (Department of Accounting and Finance, Monash University, Melbourne, Australia), Carolyn Windsor, (School of Business, Bond University, Gold Coast, Australia), Dina Wahyuni, (School of Commerce, University of South Australia, Adelaide, Australia and Department of Accounting, University of Jember, Jember, Indonesia)|
|Citation:||Michaela Rankin, Carolyn Windsor, Dina Wahyuni, (2011) "An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system: Australian evidence", Accounting, Auditing & Accountability Journal, Vol. 24 Iss: 8, pp.1037 - 1070|
|Keywords:||Carbon, Environmental management systems, GHG emissions disclosure, Governance|
|Article type:||Research paper|
|DOI:||10.1108/09513571111184751 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
|Acknowledgements:||The authors thank two anonymous reviewers for their insightful advice, and participants, discussants and reviews at both the 2009 Accounting and Finance Association of Australia and New Zealand Conference, Adelaide, and the 2009 International Perspectives on Accounting Conference, Innsbruck, Austria, for their suggestions on an earlier draft of this paper.|
Purpose – Institutional governance theory is used to explain voluntary corporate greenhouse gas (GHG) reporting in the context of a market governance system in the absence of climate change public policy. This paper seeks to hypothesise that GHG reporting is related to internal organisation systems, external privately promulgated guidance and EU ETS trading.
Design/methodology/approach – A two-stage approach is used. The initial model examines whether firms' GHG disclosures are associated with internal organisation systems factors: environmental management systems (EMS), corporate governance quality and environmental management committees as well as external private guidance provided by the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP) for 187 ASX 300 firms. EU ETS trading is also included. Determinants of the extent and credibility of GHG disclosure is examined in the second stage where an index constructed from the GHG reporting standard “ISO 14064-1” items for a sub-sample of 80 disclosing firms as the dependent variable.
Findings – Firms that voluntarily disclose GHGs have EMSs (uncertified and certified), higher corporate governance quality and publicly report to the CDP, tend to be large and in the energy and mining and industrial sectors. The credibility and extent of disclosures are related to the existence of a certified EMS, public reporting to the CDP, and use of the GRI. Firms that disclose more credible information are more likely to be large and in the energy and mining, industrial and services sectors.
Originality/value – The paper shows that some proactive but pragmatic Australian firms are disclosing their GHGs voluntarily for competitive advantage in the current market governance system in the absence of public policy.
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