Does national carbon pricing policy affect voluntary environmental disclosures? A global evidence

This paper examines the relationship between institutional pressure of national carbon pricing policy and the voluntary environmental disclosures (VED) of electricity-generating firms. Using a sample of 103 firms from forty-four countries for 2015-2017, we find that the implementation of carbon pricing policies at the national level increases the VED quantity significantly. Put differently, firms located in the carbon pricing countries disclose more environmental information than those in non-carbon pricing countries. Besides, we also provide evidence that firms adopting internal carbon reduction strategies disclose more information than firms with no carbon reduction strategies. Overall, our findings are consistent with the view of the coercive isomorphism branch of the institutional theory that the government's policy for one aspect of environmental issues (i.e., emissions reduction) may have a pervasive indirect impact on the other environmental aspects (i.e., VED) of the organizations.

Automated summary

This study found that the implementation of national carbon pricing policy significantly influences the voluntary environmental disclosures of electricity-generating firms, with firms in carbon pricing countries disclosing more environmental information and those with internal carbon reduction strategies disclosing more information. The results support the view of coercive isomorphism branch of institutional theory.