ABSTRACT
Carbon disclosures represent an essential element of the sustainability strategies companies adopt to respond to climate change risk. This chapter surveys some of the main accounting studies on the valuation implications of carbon disclosures selected from 23 leading accounting journals according to the journal quality lists. The review begins with studies on the valuation relevance of carbon disclosures mandated by government regulations, such as an emission trading scheme. The review then turns to consider work that examines voluntary carbon disclosures and explains how carbon performance facilitates the investor assessments of a company’s financial risks and opportunities. The review concludes that the accounting literature provides important empirical evidence for the valuation impact of carbon disclosures that communicate strategy- and performance-related information used by investors.
