The Effect of Plant-level Mandatory Climate Disclosure on Firm-level Voluntary Environmental Disclosure
Miss Cyndia Wang (Xin)
Ph.D. Candidate in Accounting
Sauder School of Business
University of British Columbia
Plant-level mandatory disclosure is commonly used worldwide to enhance sustainability. This study examines how plant-level mandatory climate disclosure affects corporate transparency by shaping firm-level voluntary environmental disclosure. Using the US Greenhouse Gas Reporting Program (GHGRP) that requires certain plants to disclose climate data and employing a difference-in-differences design, I find that treated firms are 9.4 to 20.8 percent more likely to voluntarily disclose firm-wide environmental data post-regulation. The results intensify under higher external environmental pressure and greater plant-level information uncertainty. Mechanism tests reveal that the external (but not internal) information mechanism drives this behavior. However, in contrast to firm-level mandatory disclosure, plant-level ones have a limited impact on firms’ reporting credibility and environmental performance, suggesting opportunistic disclosure behavior and unexpected regulatory outcomes. These findings offer implications for researchers studying disclosure dynamics, regulators assessing policy effectiveness, and investors seeking accountability in sustainability.
