Corporate carbon risk exposure, voluntary disclosure, and financial reporting quality

Tesfaye T. Lemma; Mehrzad Azmi Shabestari; Martin Freedman; Mthokozisi Mlilo

doi:10.1002/bse.2499

journal article Apr 13, 2020

Corporate carbon risk exposure, voluntary disclosure, and financial reporting quality

Tesfaye T. Lemma

Mehrzad Azmi Shabestari

Martin Freedman

Mthokozisi Mlilo

Business Strategy and the Environment Vol. 29 No. 5 pp. 2130-2143 · Wiley

View at Publisher Save 10.1002/bse.2499

Abstract

AbstractThe study examines whether corporate carbon risk exposure is associated with financial reporting quality and whether voluntary carbon disclosure mediates the relationship. We analyze data drawn from firms traded on the Johannesburg Stock Exchange (JSE), for the period 2011 to 2015. We document robust evidence that firms with higher carbon risk exposure tend to provide financial statements of poorer quality (i.e., direct effect) and this association is partially mediated through voluntary carbon disclosure (i.e., indirect effect). The overall negative association between corporate carbon risk exposure and the firm's financial reporting quality is partly explained by the quality of voluntary carbon disclosure.

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References

Details

Published: Apr 13, 2020
Vol/Issue: 29(5)
Pages: 2130-2143
License: View

Authors

T

Tesfaye T. Lemma

Department of Accounting, College of Business and Economics Towson University Towson Maryland USA

M

Mehrzad Azmi Shabestari

Department of Accounting, College of Business and Economics Towson University Towson Maryland USA

M

Martin Freedman

Department of Accounting, College of Business and Economics Towson University Towson Maryland USA

M

Mthokozisi Mlilo

School of Economics and Finance, Faculty of Commerce, Law and Management University of the Witwatersrand Johannesburg South Africa

Cite This Article

Tesfaye T. Lemma, Mehrzad Azmi Shabestari, Martin Freedman, et al. (2020). Corporate carbon risk exposure, voluntary disclosure, and financial reporting quality. Business Strategy and the Environment, 29(5), 2130-2143. https://doi.org/10.1002/bse.2499

Corporate carbon risk exposure, voluntary disclosure, and financial reporting quality

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