Stock Exchange ESG Disclosure Guidance and Carbon Mitigation: International Evidence

<p dir="ltr">This study investigates the tangible impact of the adoption of environmental, social, and governance (ESG) disclosure guidance by stock exchanges on corporate carbon mitigation. The focus is on six major reporting frameworks commonly cited in stock exchange guidance documents: the Global Reporting Initiative, the Sustainability Accounting Standards Board, the Task Force on Climate Related Financial Disclosures, the International Integrated Reporting Council, the Climate Disclosure Standards Board, and the CDP. Using a sample of large international companies, this thesis provides empirical evidence that companies listed on stock exchanges that provide ESG disclosure guidance achieve greater greenhouse gas emissions mitigation than those listed on exchanges without such guidance. Notably, this mitigation effect is particularly pronounced for Scope 1 (direct) emissions. When multiple disclosure frameworks are endorsed concurrently, the effect persists but diminishes in strength. Finally, the effect is stronger when ESG disclosure is voluntary, in developing countries, in less carbon-intensive industries, and among firms governed by civil law rather than common law systems. While short-term profitability is not significantly affected, ESG disclosure guidance enhances firms’ long-term market value and overall ESG performance. Robustness tests confirm the consistency of the results across alternative model specifications, including alternative measures of the dependent variable, country-level exclusions, additional control variables, industry×year fixed effects, and lead-lag models. The findings highlight the nuanced role of stock exchange endorsement of ESG disclosure guidance on corporate behaviour and ESG performance, emphasising the need for harmonized frameworks to optimize their environmental impact.</p>