How does sustainability leadership improve climate change reporting? The choices associated with a sustainable board- A management perspective

Abstract

In recent years, companies’ disclosure of information regarding their carbon emissions has evolved rapidly. However, an important question remains whether carbon emissions disclosure has any influence on climate change risk reporting. Previous literature has not focused on the more pressing question of how changes in carbon performance may lead to subsequent changes in climate change disclosure. This study examines how sustainable board and the use of sustainability targets in executive compensation can moderate the relationship between climate change disclosure and carbon performance. Following a mixed theoretical framework focusing on upper echelon theory, we revisit the relationship between climate change reporting and carbon performance. The Leadership Index is used to measure the level of climate change disclosure, and carbon performance is based on both the carbon intensity of emissions and the mitigation of carbon emissions. From an international sample of listed companies, we use an ordered logit regression methodology. Our study contributes to the growing literature on sustainable governance and the effect of Chief Sustainability Officer serving on the board of directors on climate change reporting. The most important idea is to know which sustainable board mechanisms should be responsible for improving climate reporting.