Organic versus cosmetic efforts of the quality of carbon reporting by top New Zealand firms. Does market reward or penalise?
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Date
2023-01-06
DOI
Open Access Location
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
ERP Environment and John Wiley and Sons Ltd
Rights
(c) 2022 The Author/s
CC BY 4.0
CC BY 4.0
Abstract
This study explores the quality of carbon reporting (QCR) by New Zealand (NZ) firms and its changes over time. It also explores the impact of QCR on the market reputation of firms. Using a sample of 300 company-year observations between 2015 and 2020 from top listed firms of NZ, the study develops a 14-item QCR index. The study finds that the company-level QCR reporting by NZ firms overall is not praiseworthy, as firms need to improve QCR in many aspects (both in-house efforts as well as external reporting). Although QCR has increased over time, firms' QCR efforts cannot be treated completely authentic. Majority of firms in NZ have disclosed unaudited carbon information to investors and other stakeholders. Additionally, our study finds that QCR positively affects the market reputations of firms, and the market behaves accordingly. Specifically, firms' organic carbon efforts are paid-off (through increased market reputation) by the market players and cosmetic/decoupled behaviour is penalised (through decreased market reputation). This study is the first on QCR reporting using a sample of NZ firms and an account of their initiatives towards the carbon emission reduction initiative and related disclosures. The study's findings have policy implications.
Description
Keywords
cosmetic, legitimacy, market reputation, New Zealand, organic, quality of carbon reporting
Citation
Khan HZ, Houqe MN, Ielemia IK. (2023). Organic versus cosmetic efforts of the quality of carbon reporting by top New Zealand firms. Does market reward or penalise?. Business Strategy and the Environment. 32. 1. (pp. 686-703).