Carbon disclosure and the cost of capital*
Abstract
We link voluntary and mandatory disclosure of carbon emissions with stock returns and volatility in a global cross-section of publicly listed firms. We find that voluntary disclosure of scope 1 emissions predicts lower stock returns relative to non-disclosing companies. We also find that UK mandatory carbon disclosure rules for publicly traded companies resulted in lower stock-level uncertainty. The effect of these mandatory disclosure rules also spilled over into other markets, especially those with close geographic and economic proximity, and companies in the same industry.
Fields of Study & Subjects
Corporate Social Responsibility Reporting
Auditing
Earnings Management
Governance
Sustainable Finance and Green Bonds
Publication details
- Journal / source
- European Accounting Review
- Publisher
- Informa UK Limited
- Pages
- 1–33
- Publication date
- 23 June 2026
- Language
- EN