Carbon disclosure, freedom and democracy
Abstract
Purpose
Wide differences in response rates to the Carbon Disclosure Project’s (CDP’s) climate change program between countries have been explained by legal origins and the varying extent of environmental regulation. This paper seeks to enhance the explanation by examining the relevance of two dimensions of “democratic capital” – both the influence of countries’ experiences with democratic government recruitment are considered, as well as experiences with civil liberties. In addition, it is examined whether these forms of democratic capital are mediated by environmental regulation.
Design/methodology/approach
The authors draw upon the literature on the relationship between political regime form and environmental policy and the environmental disclosure literature debate. Hypotheses are based on institutional and stakeholder theory. Methodologically, multilevel regression analysis is used.
Findings
Results show that the history of democratic government recruitment is a relevant factor to explain firms’ disclosure decisions. The amount of freedom in civil society seems to also matter, but results are less clear in this regard. The hypothesis concerning the mediation effects of environmental regulation could not be corroborated. Findings, thus, corroborate the claim that standards of informational transparency flourish best in countries with a pluralistic political culture.
Practical implications
The results imply that voluntary carbon transparency may thrive as democratization advances, but its success may also be endangered by the recent revitalization of authoritarianism.
Originality/value
The authors deliver the first paper which tests the hypotheses on the influence of the “democratic capital” on the countries-of-origin on the firms’ carbon disclosure decisions, based on a multilevel analysis.
Keywords
Acknowledgements
The authors thank Anita Engels for her helpful comments on earlier drafts of this paper and Kai-Uwe Schnapp for recommending indicators to measure democratic development. The authors also thank Johann Schmid for helping with the gathering and preparation of data.
Citation
Grauel, J. and Gotthardt, D. (2017), "Carbon disclosure, freedom and democracy", Social Responsibility Journal, Vol. 13 No. 3, pp. 428-456. https://doi.org/10.1108/SRJ-08-2016-0151
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited