A study on the quality of carbon disclosures, emissions, and firm value of New Zealand listed companies
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Authors
Yu, Huan
Hewagama, Gayani
Rainsbury, Liz
Hewagama, Gayani
Rainsbury, Liz
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Date
2023-12-01
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Conference Contribution - Oral Presentation
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Keyword
New Zealand
listed companies
firm value
carbon allowance accounting
carbon footprint
greenhouse gas (GHG) emissions
sustainability accounting
listed companies
firm value
carbon allowance accounting
carbon footprint
greenhouse gas (GHG) emissions
sustainability accounting
ANZSRC Field of Research Code (2020)
Citation
Yu, H., Hewagama, G., & Rainsbury, L. (2023, December, 1). A study on the quality of carbon disclosures, emissions, and firm value of New Zealand listed companies [Paper presentation]. 2023 Auckland Region Accounting (ARA) Conference, University of Auckland, New Zealand https://hdl.handle.net/10652/6482
Abstract
This study examines the quality of carbon disclosure (QCD) and its impact on firm value and carbon performance of 99 of New Zealand's largest listed companies, collectively representing over 90% of the New Zealand Stock Exchange’s (NZX) market capitalisation. Data was gathered from annual reports of these listed companies for the years 2021 and 2022. The QCD index was used for data collection, and regression analysis was performed. The findings show a 30% increase in QCD scores from 2021 to 2022. The increase can be attributed to heightened environmental awareness and New Zealand legislation mandating climate-related disclosures for certain entities, as specified by the External Reporting Board’s (XRB) climate standards, effective from 2023. The overall QCD score remained relatively low at 36.5%, showing a lack of disclosures in areas, such as emission reduction strategies and engagement with stakeholders.
The findings also show a positive relationship between QCD and firm value, indicating that higher-quality carbon disclosures can positively influence firm value. The study finds negative associations between carbon emissions and firm value, as well as between carbon emissions and QCD. This suggests that companies with high carbon emissions have lower-quality disclosures, indicating reduced transparency and effectiveness in communicating carbon-related information to stakeholders. Overall, New Zealand-listed companies display an encouraging trend of improving carbon disclosure in anticipation of the forthcoming mandatory reporting in 2023.
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