SHS Web Conf.
Volume 36, 2017The 2016 4th International Conference on Governance and Accountability (2016 ICGA)
|Number of page(s)
|24 July 2017
Carbon Emission Disclosure and the Cost of Capital: An Analysis of Malaysian Capital Market
1 Accounting Department, Universiti Tenaga Nasional
2 Economic and Finance Department, Universiti Tenaga Nasional
* Corresponding author’ email: email@example.com
The main purpose of this study is to examine the relationship between voluntary disclosure and cost of capital by exploring the impact of voluntary carbon emission disclosure (VCED) on the firm’s weighted-average cost of capital. A carbon disclosure index is used to evaluate the quality of carbon emission disclosure in 2013 and 2014 annual reports of 247 Malaysian public listed companies. By using content analysis, the result highlights a significant increase in the level and quality of carbon emission disclosure practice from 2013 to 2014. In addition, the finding from regression analysis indicates insignificant relationship between VCED quality and weighted-average cost of capital. Overall, our findings suggest that the carbon emission disclosure is still low, as such, the quality of VCED do not have an impact on firm’s cost of capital. The results of the study allow the government to measure progress toward achieving its target to reduce carbon emission and will add weight to the call by accounting regulation body such as Malaysian Accounting Standard Board for a specific standard on carbon reporting.
Key words: Climate Change / Carbon emission disclosure / Cost of Capital / CAPM / WACC
© The Authors, published by EDP Sciences, 2017
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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