TCFD reporting quality: Carbon-sensitive vs. less carbon-sensitive sectors in New Zealand listed companies
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Authors
Fernando, M.S.E.
Hewagama, Gayani
Hewagama, Gayani
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Date
2024-12-10
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Conference Contribution - Oral Presentation
Ngā Upoko Tukutuku (Māori subject headings)
Keyword
New Zealand
listed companies
firm value
Task Force on Climate-related Financial Disclosures (TCFD)
carbon allowance accounting
carbon footprint
greenhouse gas (GHG) emissions
sustainability accounting
listed companies
firm value
Task Force on Climate-related Financial Disclosures (TCFD)
carbon allowance accounting
carbon footprint
greenhouse gas (GHG) emissions
sustainability accounting
ANZSRC Field of Research Code (2020)
Citation
Fernando, M. S. E., & Hewagama, G. V. (2024, December) (2024, December, 10). TCFD reporting quality: Carbon-sensitive vs. less carbon-sensitive sectors in New Zealand listed companies [Paper presentation]. "Exploring Cutting-Edge Trends in Contemporary Accounting Research", 2024 Auckland Region Accounting (ARA) Conference, University of Auckland, New Zealand
https://hdl.handle.net/10652/6973
Abstract
PURPOSE
The study explores the relationship between the quality of climate-related disclosures in carbon-sensitive and less carbon-sensitive sectors and examines how carbon emissions impact the quality of these disclosures, based on the Task Force on Climate-related Financial Disclosures (TCFD) reporting framework. Methodology – The sample consists of 36 companies in NZX 50 for a period of three years (2021-2023). Univariate and panel regression was employed to test the hypotheses of the study.
FINDINGS
The analysis results suggest that the carbon-sensitive sector produces higher-quality climate-related disclosures compared to the less carbon-sensitive sector. The findings also reveal a positive relationship between carbon emissions and the quality of these disclosures.
PRACTICAL IMPLICATIONS
The quality of climate-related disclosures has consistently increased from 2021 to 2023, significantly influenced by the introduction of New Zealand’s mandatory climate-related disclosure requirements in January 2023. This suggests that the carbon-sensitive sector is issuing comprehensive climate disclosures in line with TCFD recommendations, enabling primary stakeholders, especially investors interested in green investments, to make informed decisions. However, the less carbon-sensitive sector is still lagging, with some companies not disclosing any climate-related information.
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