Corporate governance and the quality of green house gas emission disclosures

The introduction of the National Greenhouse and Energy Reporting Act 2007 (Cth)legislation is evidence of the importance the Australian Government places on the issue of greenhouse gas emissions (GHG) reporting. Australian corporations’ GHG disclosure information in annual reports is currently unknown as most research has focused on environmental voluntary disclosures in general. We used content analysis to produce an index wherein we assessed the quality of GHG disclosures made in the annual reports of Australian public-listed companies in 2007. Our interest was focused on whether good quality corporate governance influences the quality of GHG emission disclosures. We examined the relation between the quality of corporate governance and the quality of GHG disclosures made by 216 companies. We find that the presence of an environment committee is associated with a lower proportion of unverifiable or ‘soft’ disclosures, and that larger firms are likely to provide better quality GHG disclosures.