AAA Spark Meeting of the Regions

Do Peer Firm Environmental Goal Disclosures and Carbon Offset Programs Impact Managers’ Environmental Disclosure Choices?

• In Event: Environmental Disclosures

Abstract

This study explores the impact of two factors on managers disclosure of long-term environmental goals, the prevalence of such disclosures among industry peer firms and the availability of carbon offset programs. Drawing from moral reasoning theory, we expect managers to engage in greater disclosure of long-term environmental goals when such disclosures are prevalent among industry peer firms. However, when such disclosures are rare, the availability of carbon offset programs may increase managers’ disclosure tendencies. To test our hypotheses, we conduct a 2 × 2 between-subjects experiment, where we manipulate the disclosure behavior of industry peer firms (a high vs. low prevalence of long-term environmental goal disclosure) and the availability of carbon offsets (present vs. absent). Results suggest that managers provide the least long-term environmental goal disclosures when these disclosures are rare among industry peers and carbon offset programs are absent. Implications for research and practice are discussed.

Authors

• Serena Loftus, Kent State University

• Wei Li, Kent State University

• Yulin Zhu, Kent State University