TY - JOUR
T1 - Carbon Disclosure and Financial Performance: UK Environmental Policy
AU - Alsaifi, Khaled
AU - Elnahass, Marwa
AU - Salama, Aly
N1 - Publisher Copyright:
© 2019 John Wiley & Sons, Ltd and ERP Environment
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2020/2/1
Y1 - 2020/2/1
N2 - The outcome of carbon disclosure, the importance of which has grown remarkably in recent years to become a strategic decision-making issue for organisations in today's competitive environment, is a subject of lively debate but remains under-researched in the environmental accounting literature. This study is motivated by this research gap and the growing interest in assessing the financial consequences of corporate involvement in climate change beyond regulatory compliance, as evidenced by firms' voluntary participation in the Carbon Disclosure Project. Using the resource-based view of the firm as a theoretical framework and linking it to carbon disclosure through Carbon Disclosure Project, we conceptualise and empirically investigate the impact of adopting proactive carbon management policies and communicating them to stakeholders, focusing on the financial performance of the top FTSE350 companies between 2007 and 2015. By developing a comprehensive financial performance index and controlling for several firm characteristics, we find strong evidence that voluntary carbon disclosure is positively associated with firm financial performance.The findings in this paper provide new insights and policy implications for managers, financial stakeholders, and regulators.
AB - The outcome of carbon disclosure, the importance of which has grown remarkably in recent years to become a strategic decision-making issue for organisations in today's competitive environment, is a subject of lively debate but remains under-researched in the environmental accounting literature. This study is motivated by this research gap and the growing interest in assessing the financial consequences of corporate involvement in climate change beyond regulatory compliance, as evidenced by firms' voluntary participation in the Carbon Disclosure Project. Using the resource-based view of the firm as a theoretical framework and linking it to carbon disclosure through Carbon Disclosure Project, we conceptualise and empirically investigate the impact of adopting proactive carbon management policies and communicating them to stakeholders, focusing on the financial performance of the top FTSE350 companies between 2007 and 2015. By developing a comprehensive financial performance index and controlling for several firm characteristics, we find strong evidence that voluntary carbon disclosure is positively associated with firm financial performance.The findings in this paper provide new insights and policy implications for managers, financial stakeholders, and regulators.
KW - carbon disclosure
KW - carbon disclosure project (CDP)
KW - financial performance (FP)
KW - resource-based view (RBV)
U2 - 10.1002/bse.2426
DO - 10.1002/bse.2426
M3 - Article
SN - 0964-4733
VL - 29
SP - 711
EP - 726
JO - Business Strategy and the Environment
JF - Business Strategy and the Environment
IS - 2
ER -