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This paper aims to analyze the influence of organizational and contextual factors on companies’ decisions to set absolute emissions targets and science-based targets (SBTs).

This study uses a sample of 23,166 observations across 69 countries from 2016 to 2020 to analyze the likelihood of firms to establish absolute emissions targets and SBTs.

The results show that firm size, governance, climate-related regulation and moral acceptance in the country in question positively influence companies’ decisions on these matters. Furthermore, while profitability has a positive influence on the participation of companies in the SBT initiative (SBTi), both the financial risk involved and sector emissions intensity can discourage companies from participating in the SBTi or from establishing absolute emissions targets.

This study may allow regulators and policymakers to encourage carbon information disclosure with a greater focus on aspects that specifically contribute to evaluating ways of promoting effective behavior on the part of companies in the fight against climate change.

The results of this study serve to support the demands of civil society, as well as to guide regulators in the design of measures in the fight against climate change and steer the decision-making of investors in moving toward a low carbon economy.

To the best of the authors’ knowledge, this study is the first to examine whether organizational and contextual factors affect companies’ propensity to set absolute emissions targets and SBTs.

This study aims to analyse the relationship between countries’ regulatory context and voluntary carbon disclosures. To date, little attention has been paid to how specific climate change-related regulation influences companies’ climate change disclosures, especially voluntary carbon reporting.

The New Institutional Sociology perspective has been adopted to examine the pressure of a country’s climate change regulation on voluntary carbon reporting. This research uses Tobit regression to analyse data from 2,183 companies in 12 countries that were invited to respond to the Carbon Disclosure Project (CDP) questionnaire in 2015.

The results show that countries’ specific climate change-related regulation does influence both the participation of its companies in the CDP and their quality, as measured by the CDP disclosure score.

The sample is restricted to 12 countries’ regulatory environment. Thus, caution should be exercised when generalising the results to other institutional contexts.

The results are of use to regulators and policymakers to better understand how specific climate change-related regulation influences voluntary carbon disclosure. Investors may also benefit from this research, as it shows which institutional contexts present greater regulatory stringency and how companies in more stringent environments take advantage of synergy to disclose high-quality carbon information.

By linking regulatory and voluntary reporting, this study sheds light on how companies use voluntary carbon reporting to adapt to social expectations generated in their institutional context.

This is the first research that considers specific climate change-related regulation in the study of voluntary carbon disclosures.