The Impact of Carbon Disclosure Mandates on Emissions and Financial Operating Performance

Discussion Papers 1875, 41 S.

Benedikt Downar, Jürgen Ernstberger, Stefan Reichelstein, Sebastian Schwenen, Aleksandar Zaklan

2020. Updated Version of DP 1795 (2019).

get_appDownload (PDF  404 KB)


We examine whether a disclosure mandate for greenhouse gas emissions creates stakeholder pressure for firms to subsequently reduce their emissions. For UK-incorporated listed firms such a mandate was adopted in 2013. Using a difference-in-differences design, we find that firms affected by the mandate reduced their emissions – depending on the specification – by an incremental 14-18% relative to a control group. This reduction was accompanied by an average 9% increase in production costs. At the same time, the treated firms were able to increase their sales by an almost compensating amount. Taken together, our findings provide no indication that the disclosure requirement led to a significant deterioration in the financial operating performance of the treated firms, despite the significant carbon footprint reduction following the disclosure mandate.

Aleksandar Zaklan

Research Associate in the Energy, Transportation, Environment Department

JEL-Classification: Q28;Q40;M41;M48
Keywords: Disclosure of non-financial information, mandatory disclosure, greenhouse gas emissions, real effects