What determines the quality of carbon reporting? A system oriented theories and corporate governance perspective

Muhammad Nurul Houqe, Habib Khan

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Abstract

The study examines the determinants of the quality of carbon reporting (QCR) by top listed firms of a developed country. Using a sample of the top 50 listed firms of New Zealand (NZ) sampled over a period of 6 years (2015–2020), the study measured QCR index using 14-items and analysed the data using regression analysis. The study finds that external factors, namely, carbon regulation (Emission Trading Scheme—ETS law), use of a standardised reporting format for non-financial reporting (Global Reporting Initiative, GRI) template, and environmental and social (E&S) performance, all positively influence the QCR. The study also finds that corporate governance attributes namely board diversity (women's representation on the board) and board size positively influence the QCR. Lastly, the study finds that top firms in NZ have many areas of improvement in reporting quality carbon information. The study is the first empirical research on QCR from NZ firms that evidences multiple institutional factors and governance elements as key explanatory factors driving towards making carbon reporting credible and reliable.
Original languageEnglish
Pages (from-to)1-20
Number of pages20
JournalBusiness Strategy and the Environment
Early online date12 Nov 2022
DOIs
Publication statusE-pub ahead of print - 12 Nov 2022

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