Fighting Climate Change with Disclosure? The Real Effects of Mandatory Greenhouse Gas Emission Disclosure

Discussion Papers 1795, 39 S.

Benedikt Downar, Jürgen Ernstberger, Hannes Rettenbacher, Sebastian Schwenen, Aleksandar Zaklan

2019

get_appBeitrag (PDF  391 KB)

Abstract

We examine how mandatory disclosure of greenhouse gas (GHG) emissions influences companies’ emission levels. We identify the effect of full transparency by exploiting a mandate requiring UK-incorporated listed companies to disclose information on GHG emissions in their annual reports. Comparing the emissions of installations (e.g. power plants, or oil refineries) owned by listed companies and installations owned by firms not subject to the mandate, we document that disclosing GHG emissions in annual reports reduces emission levels by up to 18%. Emission reductions occur across all industries but are largest for installations from the energy supply industry. Our results are robust to various specifications and document the incremental effect of disclosing emission data in annual reports, as firms had to report emission data to a central register already before the disclosure mandate.

Aleksandar Zaklan

Wissenschaftlicher Mitarbeiter in der Abteilung Energie, Verkehr, Umwelt



Keywords: Disclosure of non-financial information; greenhouse gas emissions; real effects