Contextual and corporate governance effects on carbon accounting and carbon performance in emerging economies

• DOI: https://doi.org/10.1108/CG-10-2020-0473
• Published date: 05 March 2021
• Date: 05 March 2021
• Pages: 536-550
• Subject Matter: Strategy,Corporate governance
• Author: Carmen Cordova,Ana Zorio-Grima,Paloma Merello

Contextual and corporate governance

effects on carbon accounting and carbon

performance in emerging economies

Carmen Cordova, Ana Zorio-Grima and Paloma Merello

Abstract

Purpose –This paper aims to explore the driving forces for having carbon reporting and carbon

reductionmanagement strategies in emerging and developingcountries.

Design/methodology/approach –The methodologyemployed uses logit and linear panel datamodels

and generalizedmoments method, to avoid endogeneity problems.

Findings –The results show that the carbonreporting decision is positively related to being located in

Africa or America (as opposedto Asia), publishing a sustainability report and having certain corporate

governance (CG) attributes such as a corporate social responsibility (CSR) committee, larger board

size and an executive compensationpolicy based on environmental and social performance.Regarding

the driving forcesleading to a reduction of carbon emissions,no evidence is obtained on the effect of the

variablesconsidered.

Practical implications –The evidence obtained is valuable, as it can help standard-setters in these

geographical areas to promote actions in the field of CG to increase transparency. Nonetheless,

additional measures to disclosure should be needed in the future to help decrease carbon emissions

more effectively.

Social implications –Raising awareness amongst companies helps mimetic isomorphism take place

so that effortscan be made to report levels of pollutionin an initial phase, which hopefullyin the future may

be managed to try to keep a decreasing path. Therefore, implications of this research are crucial for

emergingand developing countries, as they are especiallyvulnerable to climate change.

Originality/value –To the best of the authors’ knowledge, this is the first paper to look into this

phenomenon in emerging and developing countries from Asia, Africa and America.This contribution is

unique as this research showsthat location, publication of a sustainability report together withsome CG

attributesare drivers for carbon transparency.

Keywords Carbon emissions, Corporate governance, Developing economies, HDI, GHG,

Carbon management systems

Paper type Research paper

1. Introduction

Climate change is one of the most important problems in the global agenda today. In fact,

the Paris Agreement represents the acknowledgement of this threat, as well as the

countries’ commitment to keep the global temperature rise below 2˚C this century.

Signatories are expected to adopt long-term climate strategies to facilitate the transition

towards a decarbonized economy, which includes the implementation of management

control systems (Hosoda and Suzuki, 2015;Hosoda, 2018) enabling the gathering of this

type of data, its analysis, controland reporting to a broad range of stakeholders.

The academic debate on this topic has been mostly focused on developed Western

economies. There seems to be a gap regarding emerging and developing countries, where

research is still scarce or limited to descriptive studies both in terms of sustainability and,

Carmen Cordova is based

at the Department of

Business Sciences, Private

Technical University of

Loja, Loja, Ecuador.

Ana Zorio-Grima and

Paloma Merello are based

at the Department of

Accounting, University of

Valencia, Valencia, Spain.

Received 19 June 2020

Revised 11 November 2020

18 November 2020

Accepted 18 November 2020

A.Z-G. acknowledges financial

support from the Generalitat

Valenciana ICO/2017/092 and

C.C. acknowledges financial

support from Universidad

Te

´cnica Particular de Loja.

Funding: This work was

supported by the Generalitat

Valenciana [ICO/2017/092] and

financial support from Private

Technical University of Loja.

Declaration of interests: The

authors declare that they have

no known competing financial

interests or personal

relationships that could have

appeared to influence the work

reported in this paper.

PAGE 536 jCORPORATE GOVERNANCE jVOL. 21 NO. 3 2021, pp. 536-550, ©EmeraldPublishing Limited, ISSN 1472-0701 DOI 10.1108/CG-10-2020-0473