TY - JOUR
T1 - Carbon emission disclosures and financial reporting quality
T2 - Does ownership structure and economic development matter?
AU - Bilal,
AU - Tan, Duojiao
AU - Komal, Bushra
AU - Ezeani, Ernest
AU - Usman, Muhammad
AU - Salem, Rami
N1 - Funding Information:
This research is supported by the Accounting Development Research Center of the Hubei University of Economics ; and Hubei University of Economic's excellent Ph.D. program-wide grant number XJ18BS06 . This research also supported by National Natural Science Foundation of China under Grant No. 72074198 , and 71874165 ; the National Social Science Fund of China (Grant No. 21AZD074 ); the Research Foundation of Philosophy and Social sciences of Ministry of Education of China No. 20JHQ094 ; Young Talents Foundation of the Central Propaganda Department ; the Fundamental Research Funds for National Universities, China University of Geosciences (Wuhan) .
Publisher Copyright:
© 2022 Elsevier Ltd
PY - 2022/11
Y1 - 2022/11
N2 - Carbon emission disclosures have lately gained considerable attention from investors, public companies, and regulators due to their adverse impact on global warming. Our study examines the implication of the extent of carbon emission disclosures on financial reporting quality. Using a sample of the Chinese high polluting companies from 2012 to 2018, we found a negative relationship between carbon emission disclosures and discretionary accruals, indicating that companies with more carbon disclosures have better financial reporting quality. In addition, we find that state-owned Chinese companies with more carbon disclosures experienced better financial reporting quality. Furthermore, we find that companies from more developed regions that engage in carbon emission disclosure are also associated with higher financial reporting quality than companies from less developed regions. Our findings are robust using alternative methodologies. Our study has implications for companies' managers since it helps them legitimize their actions to stakeholders by providing carbon emission disclosures and higher financial reporting quality. It will assist the Chinese regulators and policymakers in encouraging high-polluting companies to voluntarily disclose more carbon-related matters for different stakeholders.
AB - Carbon emission disclosures have lately gained considerable attention from investors, public companies, and regulators due to their adverse impact on global warming. Our study examines the implication of the extent of carbon emission disclosures on financial reporting quality. Using a sample of the Chinese high polluting companies from 2012 to 2018, we found a negative relationship between carbon emission disclosures and discretionary accruals, indicating that companies with more carbon disclosures have better financial reporting quality. In addition, we find that state-owned Chinese companies with more carbon disclosures experienced better financial reporting quality. Furthermore, we find that companies from more developed regions that engage in carbon emission disclosure are also associated with higher financial reporting quality than companies from less developed regions. Our findings are robust using alternative methodologies. Our study has implications for companies' managers since it helps them legitimize their actions to stakeholders by providing carbon emission disclosures and higher financial reporting quality. It will assist the Chinese regulators and policymakers in encouraging high-polluting companies to voluntarily disclose more carbon-related matters for different stakeholders.
KW - Carbon emission disclosures
KW - Climate change
KW - Financial reporting quality
KW - High polluting industries
KW - State-owned enterprises
U2 - 10.1016/j.envsci.2022.08.004
DO - 10.1016/j.envsci.2022.08.004
M3 - Article
AN - SCOPUS:85137285619
SN - 1462-9011
VL - 137
SP - 109
EP - 119
JO - Environmental Science and Policy
JF - Environmental Science and Policy
ER -
