The Value Relevance of Corporate Voluntary Carbon Disclosure : Evidence from the United States and Bric Countries

Our study focuses on the value relevance of corporate voluntary carbon disclosure. Our sampleincludes firms from the United States (listed in the S&P 500) and firms from Brazil, Russia,India, and China that are targeted by the CDP. We examine whether the capital marketrewards firms’ voluntary carbon disclosure. Voluntary carbon disclosure is measured asfirms’ propensity to voluntarily disclose carbon information and the comprehensivenessand quality of their disclosure.Wefind that firms with greater carbon disclosure have higherfirm value. Furthermore, the positive association between firm value and voluntary carbondisclosure is stronger in developing countries.Wealso find that large emitters with sufficientcarbon disclosure experience a less negative valuation than firms with inadequate carbondisclosure. Furthermore, a subcomponent analysis suggests that the disclosure of specifictypes of climate risk and opportunity is rewarded by investors and can mitigate the valuationpenalty of carbon emissions. These results have important implications for companies, investors,and regulators. Our analyses enhance understanding of the consequences of voluntarycarbon reporting, which enriches the reporting of current financial information