Carbon emissions Carbon Disclosure Quality and Enterprise Value

[Abstract] the carbon constrained environment, companies determine the carbon intensity of regulatory risk faced by business size, Carbon Disclosure of enterprises with stakeholders important bridge. For 2010 was selected S & P500's 85 corporate carbon emissions and carbon disclosure quality value relevance of empirical research found that: corporate carbon emissions and enterprise value significantly negatively correlated; Carbon Disclosure quality and corporate values ​​positively correlated but not significantly; regulatory environment for enterprise carbon disclosure quality, carbon emissions and enterprise value correlation greater impact, high emitters of carbon emissions and the enterprise value was significantly negatively correlated with the Carbon Disclosure quality and business value negatively correlated; low emission corporate carbon disclosure quality, carbon emissions are associated with the enterprise value.

[Keywords:] enterprise value; carbon disclosure quality; carbon emissions; regulatory environment; carbon emissions; Social Responsibility Accounting; environmental accounting; papers to write
From an international perspective, carbon reduction issues with environmental, political, economic triple property, which or to reshape the world economic landscape. EU, Canada, Japan, Australia, the United States and so compel businesses reporting GHG (Greenhouse Gas, abbreviated as GHG) emissions: The EU requires its member states adopted the 'greenhouse gas monitoring and reporting guidelines' (Monitoring & Reporting Guidelines of green  house gas emissions); Canada issued a 'greenhouse gas emissions reporting' (The Greenhouse Gas Emissions Report); Australian government issued the 'National Greenhouse Gas and Energy Reporting Act' (National Greenhouse and Energy Reporting Bill 2007); U.S. EPA released 'mandatory greenhouse gas reporting system' (Mandatory Reporting of Greenhouse Gases Final Rule); U.S. Securities and Exchange Commission issued a 'disclosure of information on climate change interpretive guidance.' To seek a 'legitimate' social status, voluntary disclosure of carbon information more and more enterprises. However, the capital market is aware of corporate carbon emissions and the Carbon Disclosure importance of quality? Carbon emissions by the capital markets business is a more severe punishment it? This paper intends to examine these questions through empirical be answered.

A literature review Broadly speaking, the Carbon Disclosure belongs to the social responsibility accounting and environmental accounting research category, but the emerging carbon disclosure issues regarding this study focused on the following three aspects.

(A) on the Carbon Disclosure Framework research Currently, more representative of the Carbon Disclosure framework has the Carbon Disclosure Project (Carbon Disclosure Project, abbreviated as CDP) questionnaire, the Canadian Institute of Chartered Accountants 'Improved Management Discussion and Analysis : disclosure on climate change, 'Climate Risk Disclosure Initiative' on the global framework for climate risk disclosure, 'Climate Disclosure Standards Board of the' Draft Framework on Climate Change report, 'and the U.S. Securities and Exchange Commission' and the disclosure of information related to climate change Guide '[1]. The disclosure framework from different angles pointed enterprise should disclose the carbon content, which CDP main survey of corporate leaders on climate change-related risks and opportunities awareness about corporate GHG emissions accounting and GHG reduction, as well as enterprises cope Climate change governance measures. Canadian Institute of Chartered Accountants believes that investors care about corporate strategy to address climate change, concerns enterprises are facing climate change-related physical risks, regulatory risks, reputational risk and corporate GHG emissions may bring financial impact, the proposed business through the 'management Discussion and Analysis 'disclosure of such information. Climate Risk Disclosure Initiative believe that companies should disclose the history, present, information on GHG emissions are expected to be taken and emissions management strategies for climate change-related risks and physical risks associated with GHG regulatory evaluation and analysis, the organization strongly recommends that companies will be its advocacy of mandatory financial reporting framework, CDP project, the Global Reporting Initiative and other disclosures in combination. Climate Disclosure Standards Board disclosure framework for enterprises involved in the strategic analysis of climate change, from climate change, regulatory risks, physical risks, GHG emissions information and other content. SEC recommends that companies according to the applicable regulatory roadmap to identify climate change-related information disclosed. In China, Zhangcai Ping et al and TAN De-ming et al from carbon accounting, carbon management, carbon reduction audit made three dimensions of corporate carbon disclosure framework [23]. Zhang Qiaoliang that information reliability, completeness, comparability is to determine the quality of the information the three key factors, but the CDP (2003-2010 years) the information provided in these three areas, but not ideal, but does not reflect the corporate response to climate change GHG reduction strategies and corporate financial performance measures the intrinsic link between [45].

(Two) of carbon have been disclosed information about the decision usefulness of Doran and Quinn believes that the lack of uniform carbon disclosure norms, investors are difficult to obtain useful information for decision making [6]. Stanny that mandatory disclosure is more conducive to the stakeholders assess the business impact of carbon regulation [7]. Hesse and Kolk such that the pressure of institutional investors signing the CDP questionnaire has an important role in the recovery, but difficult for investors to evaluate the carbon emission reduction measures, according to the company's financial results of [89].

Freedman and Jaggi, the parent country ratified the 'Kyoto Protocol' of the enterprise information disclosed is not conducive to shareholders' understanding of the carbon investment target for the fulfillment of social responsibility, the EU countries, companies and climate change-related information disclosure clearly inferior Japanese and Canadian companies, changes in carbon emissions and there is no intrinsic link between information disclosure, existing disclosure does not really reflect the corporate carbon management performance [1011].

(Three) on the impact of carbon emissions on the enterprise value of Matsumura et al showed that carbon emissions and the company's market value negatively correlated with the cost of equity capital negatively correlated with the cost of debt capital positively correlated [12]. Chapple's research shows that companies with respect to carbon emissions, the carbon emissions of enterprises will be more severely punished by the market, this punishment is expected to reach a total market capitalization of companies 6. 57% [13]. Johnston and other power companies in the U.S. sulfur dioxide emission allowances held as an alternative variable, capital market pricing of emission quotas held by an enterprise carried out, the results show that the emissions quota value of the assets and real options have value, but pay more attention to the capital market emissions quota asset value [14].

From the existing research results can be found, although the company's carbon emissions disclosure has caused theorists and practitioners of attention, but specifically for the Carbon Disclosure quality and corporate relationship between the value of the relative lack of study, while the intensity of carbon emissions Influence of enterprise value is only in its infancy. As listed companies in China Carbon Disclosure can not meet this study needs, so I randomly selected in 2010 S & P500 index of 85 companies, the use of quantitative analysis method to study corporate carbon emissions, carbon quality of information disclosure on corporate value affected. Meanwhile, whether by the U.S. EPA (Environmental Protection Agency, abbreviated as EPA) 'greenhouse gas mandatory reporting system' of control as the standard, the paper will be divided into high-carbon sample enterprises enterprises and two sub-samples of low-carbon enterprises, research government regulation on corporate carbon emissions, Carbon Disclosure quality and corporate correlation between the value of.

Second, the theoretical analysis and hypotheses (a) carbon emissions carbon emissions and enterprise value as increasingly stringent regulatory regime, corporate carbon emissions will gradually become the most concerned stakeholders, environmental information, supply chain vendors, general consumer those products and services for enterprise carbon footprint information needs will directly affect the company's sales revenue. Any carbon emission reduction measures will be on the firm's cash flows have an impact, but companies can not effectively implemented if the carbon emission reduction measures, it is necessary to purchase carbon emission quotas and subject to regulatory penalties. Therefore, the carbon emissions of different enterprises, enterprises face the risks associated with the level of carbon emissions will also vary, capital market pricing of corporate carbon emissions risks result will directly affect the cost of capital, and indirectly affect the cash flows. Based on the above analysis, we propose a hypothesis.

Assumption 1: corporate carbon emissions associated with business value negatively.
(Two) the regulatory environment, the Carbon Disclosure quality and corporate values ​​are relatively high carbon emissions enterprises will face greater pressure to reduce emissions and a more stringent regulatory environment. For external stakeholders, corporate real carbon management performance with unobservable nature, they can only be collected by virtue of carbon management information analysis is invested enterprises may face climate change-related risks and opportunities, which are predicted Investors expected future cash flows and assess the value of investments to determine their return on investment expected to be required. From the implementation of the Carbon Disclosure business perspective: on the one hand, the carbon mass by acting on information disclosure and directly affect the cost of capital investment projects on their own evaluation criteria, which indirectly affect the expected cash flows; the other hand, high-quality The Carbon Disclosure may be seen as the capital markets business of carbon emissions into their long-term strategic planning and operational systems of a 'promise' to form a competitive advantage. Therefore, we propose the following two assumptions.

Assumption 2: Carbon Disclosure Quality and positively related to enterprise value.
Hypothesis 3: carbon emissions, carbon, carbon emissions quality of information disclosure on corporate value greater impact.

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Third, the study design (a) variable selection and model specification of this article is the enterprise value of the variable to be explained, since CDP annual report was released on March 8-10, capital markets Reaction of this information is expected to continue until the end, so the end of this enterprise as the company's stock market capitalization approximate enterprise value, denoted MKt. According to the proposed hypothesis, this article will Carbon Disclosure Quality (CDLIt), corporate annual carbon emissions (TEMITt) as explanatory variables, the degree of control of greenhouse gas emissions (EPAt) as the grouping variable. Since Carbon Disclosure still belongs to environmental information and the scope of social responsibility information disclosure, drawing existing research results, the paper selection firm size, firm profitability that year, corporate end gearing ratio as control variables, the following research model building, model relevant variables defined in Table 1.

(C) regression model fit test results are shown in Table 5. In Table 5, the adjusted R2 is 0  565, indicating that the model is constructed in this paper goodness of fit is better. D  W statistic is 2  122, a sample size of 78 ②, explanatory variables for the 5 D  W test bounds were 1  55 and 1  75 (from the D  W test sheet of the upper and lower bounds), can be seen Since the variable does not exist between the autocorrelation.

Table 6 is the regression coefficient table, each variable variance inflation factor (VIF) values ​​are less than 10, which indicates that the variable does not exist between the problem of multicollinearity. Carbon Disclosure Quality Score (CDLI) standardized regression coefficient is 0. 048, but with a probability of 0. 529, did not pass the significance test, indicating that the Carbon Disclosure quality and corporate relationship between the value of the number is not significant. Carbon emissions (TEMIT) regression coefficient is -0. 171, with a probability of 0. 032, and at the 5% level, a significant negative correlation, indicating that the increase in corporate carbon emissions will reduce the enterprise value.
V. Conclusions and Policy Recommendations (a) research findings in the carbon-constrained environment, companies determine the carbon intensity of regulatory risk faced by business size, Carbon Disclosure of enterprises with stakeholders important bridge. Based on the 2010 selected S & P500's 85 corporate carbon emissions, carbon quality of information disclosure, the regulatory environment and the enterprise value of the empirical correlation after the draw the following three conclusions.

1. Corporate carbon emissions and enterprise value significantly negatively correlated with corporate carbon emissions significantly negatively correlated enterprise value, which is presented in this paper assume a match, indicating that investors information on corporate carbon emissions are more sensitive, and that carbon emissions and more enterprises will bear more emission control costs and face higher risks that could eventually lead to the decline in value invested enterprises.

2. Carbon Disclosure enterprise value relevance of the quality of information disclosure quality is not high carbon impact on corporate value is not significant, which is contrary to hypothesis 2 of this article, this result may be due to: first, CDP does not belong to the mainstream of information Disclosure of channels, it is difficult due to investors' attention. Second, CDP survey itself has some limitations, such as the CDP questionnaire is evolving, enterprises to the CDP Carbon Disclosure is voluntary disclosure, CDP information is difficult to achieve from a qualitative to a quantitative measure of the change of information between enterprises not comparable, and so on. Third, CDLI itself has some limitations, CDLI only source of information for enterprises answered CDP questionnaire, did not consider corporate social responsibility through reports, annual reports and other sources of carbon disclosure information, so CDLI score based itself in a constant perfected.

3. Regulatory environment for carbon disclosure quality, carbon emissions associated with corporate value greater impact although Carbon Disclosure Quality and the correlation between the enterprise value was not significant, but the two companies in carbon emissions is a negative correlation between In the low-carbon businesses showed a positive correlation between the reason for this difference may lie: high emission enterprises are facing greater regulatory risk, in the absence of mandatory disclosure norms circumstances, corporate carbon disclosure more fully, the enterprise worth more unfavorable. Carbon emissions in the enterprise, the enterprise value of carbon emissions significantly and negatively correlated, and relevance to be higher than the overall sample; carbon emissions in the enterprise, the enterprise value and carbon emissions were positively correlated, but not significantly.

(Two) policy recommendations on international carbon management trend is through an international marketing supply chain, by the State, regional level extended to enterprise level, to publicly disclose the information as a means of sewage pollution control regulation is the third wave [16] . Based on the resulting research findings, this paper proposes the following policy recommendations.

1. Carbon Disclosure standard-setting norms and writes mainstream reporting carbon emissions from our existing assessment criteria apply only to the steel industry, does not have universal applicability. Therefore, we should draw on the existing Carbon Disclosure report evaluation, combined with China's specific national conditions, to develop one for listed companies in China Carbon Disclosure framework, and as a part of corporate annual reports included in the notes to the financial statements , which can help enterprises in accordance with the needs of investors and the government to disclose carbon information, thus avoiding the company independently developed the high cost of the carbon content of information disclosure and the pertinence of the state. Meanwhile, a combination of annual disclosure investors and government departments to facilitate information gathering carbon to avoid disclosure of non-traditional information disclosure on corporate carbon signaling effect weakened.

2. Develop and implement a comprehensive Carbon mandatory disclosure policy at present, China's corporate carbon disclosure policy only for the carbon emissions trading enterprises, these enterprises required to disclose annually to the competent bodies of the carbon emissions that year. However, the carbon emissions trading scheme once successful trial will be extended to the whole country, the Carbon is the enterprise on the basis of carbon emissions trading is the basis for investors to evaluate investments, so the state should establish a mandatory corporate carbon information disclosure policy and extend to all listed companies. This mandatory disclosure policy, if implemented, companies will focus on their carbon emissions impact on corporate reputation, and thus will be more emphasis on low-carbon or non-carbon investment projects, so you can check the source of carbon emissions continued growth development trend [17], but also for the promotion of carbon emissions trading scheme and lay a good foundation for China's carbon emissions pricing data provide some reference.


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