Mandated greenhouse gas emissions and required SEC climate change disclosures (original) (raw)
Related papers
Greenhouse gas reporting and the Carbon Disclosure Project
6th Asia Pacific …, 2010
This paper explores the voluntary disclosure of climate change-related information by global energy companies responding to the Carbon Disclosure Project (CDP), and examines the use of the Greenhouse Gas (GHG) Protocol as a reporting model.
Global Warming Disclosures: Impact of Kyoto Protocol Across Countries
Journal of International Financial Management & Accounting, 2010
The Kyoto Protocol that went into effect in February 2005 set limits on the amount of greenhouse gas (GHG) emissions. We document in this study that firms from countries ratifying the Protocol and setting limits on GHG emissions (i.e., European Union [EU] countries, Canada and Japan) are associated with higher GHG disclosures compared with firms in the United States, which has not ratified the Protocol. Additionally, we document that firms from India, which has not set any limits on GHG emissions, make even less GHG disclosures than firms from all other countries covered in this study. Our findings also show that GHG disclosures are greater for Canadian and Japanese firms compared with firms from the EU countries and that they also differ somewhat across EU firms. These findings suggest that ratification of the Protocol and limits on emissions improve pollution disclosures. In the absence of Protocol ratification, mandatory disclosure requirements may be needed to ensure adequate and reliable pollution disclosures.
Accounting for climate change and the self-regulation of carbon disclosures
Accounting Forum, 2011
Adopting a form of "critical dialogic engagement" , this paper explores how dominant environmental discourses can influence and shape carbon disclosure regulation. Carbon-related disclosures have increased significantly in the last five years, and many of these disclosures remain voluntary. This paper considers both the construction of self-regulated carbon disclosure practices and the role that this kind of carbon information may have in climate change-related decision making. Our preliminary findings indicate that the methodological diversity underpinning carbon disclosures may inhibit the usefulness of climate change-related data. To explore these issues, this paper focuses on the Carbon Disclosure Project (CDP) and the use of the Greenhouse Gas (GHG) Protocol as a reporting model within it.
This issue brief provides an assessment on the role of carbon emissions disclosure as a governance tool in the recently rekindled global effort to limit temperature increases to no more than two degrees Celsius. Since the 1990s, a number of mandatory and voluntary government schemes emerged, which, together with non-governmental initiatives, require or encourage enterprises to measure and report their emissions. a variety of public and private climate governance arrangements, including the UNFCCC now call for disclosure as a way to further a variety of goals in climate change mitigation. Carbon disclosure involves the regular collection and dissemination of information about firm's carbon emissions and environmental performance. Instead of mandating specific outcomes, governance by disclosure is concerned with establishing procedures for information generation, dissemination, accessibility or usability. Information disclosure provide consumers, investors, and regulators with more knowledge to assess corporate strategies and liabilities in relation to climate change, thereby giving companies an economic incentive to reduce emissions. KEY FINDINGS • Carbon disclosure is increasingly playing a role in the global governance effort in climate change mitigation with more governments, NGOs and corporations taking part in various mandatory and voluntary disclosure schemes. • Carbon disclosure plays a role beyond inducing behavioral change and inputs into other governance mechanisms by increasing transparency and accountability. • Evidence of its direct role in reducing emissions is limited and raises doubt about the value that carbon disclosure initiatives have for investors, NGOs or policy makers. • Lack of standardization limits the value of disclosed information to key stakeholders and is a major reason for its ineffective role in climate change governance. POLICY RECCOMENDATIONS for carbon emissions disclosure to overcome its current limitations and play a significant role in global governance efforts to limit temperature increase to no more than 2-degrees, a set of actions must be taken; • Encourage further research on the effectiveness of carbon disclosure to develop a better understanding of the confounding results in the existing literature • Further global effort to ensure standardization in reporting and accounting • Establish an international institution mandated to collect, verify and publicly disclose information about emissions from all significant global carbon sources
Climate Change Disclosure of the Financial Sector
2018
The impacts of climate change continue to grow in severity. Consequently, there is a call for action to all stakeholders, including the business community and the financial sector. An important piece in analyzing the impact of different groups on climate change and climate change solutions is transparent reporting about impacts on climate change and contributions to mitigate and adapt to climate change. Currently, the Tasks Force on Climate Related Disclosures (TFCFD), founded by the Group of Twenty (G20), is addressing climate-related reporting in the financial industry and attempting to establish standards to enable the industry to address climate-related risks and opportunities. An empirical study conducted by the authors, however, found that the industry still has some work to do to address climate change in their reporting. Based on the current state of reporting, recommendations include: that the financial sector develops indicators and risk assessment models for climaterelated risks that go beyond direct materiality and include indirect risks to be able to address future risks; that climate-related accounting for financial products and services should be developed and implemented; that the financial industry should implement standardized carbon disclosure; and that climate-related risk assessment should be offered as a service for the financial sector's clients.
2023
To remain relevant in the green transition, companies are beginning to voluntarily account for the exchange of emissions in their supply chain transactions and using the resulting greenhouse gas inventories for climate resilient decision support. Market advantages of sustainability and transparency see a shift from internal decision support tools to external communication tools which potentially expose companies to the risk of uncovering greenwashing if claims are not supported by transparent data, sound modelling, and a climate just emissions inventory, which considers external impacts connected to the production system. The different methods and standards in place for such greenhouse gas inventories, despite all referring to the ISO life cycle analysis standards and guidelines, present mixed signals and leave room for different interpretations, that may ultimately lead to cascading greenwashing, misleading results, and false successes. The new GHG Protocol Land Sector and Removals Guidance draft addresses this in part. With the GHG Protocol moving into revision periods, we identify gaps that present barriers to companies, or allow for interpretations that goes against the intentions of reporting GHG emissions related to an activity or organisation. The literature agrees that not rectifying these subtleties present counterproductive decision support for the green transition's overall goal: to reduce global emissions. Keywords-climate change mitigation and adaptation; economic structures; inequality; driving forces; transitional risks; consequential attributional Scope 3 emissions and inequalities Companies are expected to play a pivotal role in reaching national emission targets by reducing their production related emissions, but such policies do not yet address embedded emissions in the value chain. Still, companies can voluntarily disclose their organisational or product footprints, and carbon management strategies e.g. via CDP (formerly the Carbon Disclosure Project) and Science Based Targets (SBTi) on a global level. In Europe, emission disclosure is expected to be part of the larger requirements for companies satisfying the Corporate Sustainability Reporting Directive (CSRD) (European Commission, 2022). The dominant language for how to estimate these emissions follow the Greenhouse Gas Protocol (GHGP), which define three scopes that emission sources are allocated to, and how to navigate varying qualities of data. For the majority of companies, the most significant portion of their emissions are in scope 3, the value-chain (Sanderson, 2021). Despite contributing so much, activities reported across the 15 categories of scope 3 (both up and down the value chain) are chosen by the company, and all 15 categories are considered optional by the GHGP. If we consider perceptions of justice and sustainability against the global emission distribution, we can say that including scope 3 emissions is a requirement for the climate just GHG inventory. Further, if the inventory is to provide adequate decision support, the methods used to estimate emissions need to represent the true impact, i.e. by including all relevant activities and considered from a systems perspective, for a just and sustainable global transition. The most significant Disclaimer/Publisher's Note: The statements, opinions, and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of MDPI and/or the editor(s). MDPI and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions, or products referred to in the content.