Carbon Disclosure and the Cost of Capital

DOI

10.2991/icmesd-17.2017.80How to use a DOI?

Keywords

Carbon Disclosure, Carbon performance, Cost of capital, Voluntary disclosure.

Abstract

We examine the relation between carbon disclosure and the cost of capital and explore a potential benefit associated with carbon disclosure: a reduction in firm's cost of capital. Employing a sample of U.S. S&P 500 corporations that present their CDP reporting on the websites of CDP organization, we find that the cost of capital is significantly negative associated with carbon disclosure. However, the negative relation can be mitigated among the firms with superior carbon performance. We also find that the level of carbon disclosure is higher among poor carbon performers than good carbon performers, which can provide some preliminary evidences for legitimacy theory. Our results provide evidence on the rationales behind and the consequences of the recent trend in voluntary carbon disclosure.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

TY  - CONF
AU  - Die-Lin He
PY  - 2017/05
DA  - 2017/05
TI  - Carbon Disclosure and the Cost of Capital
BT  - Proceedings of the 3rd Annual International Conference on Management, Economics and Social Development (ICMESD 17)
PB  - Atlantis Press
SP  - 429
EP  - 435
SN  - 2352-5428
UR  - https://doi.org/10.2991/icmesd-17.2017.80
DO  - 10.2991/icmesd-17.2017.80
ID  - He2017/05
ER  -