Theories applicable to corporate climate change disclosure

• Published date: 01 October 2022
• Author: Ying Guo,Joanna (Jingwen) Zhao,David C. Yang
• Date: 01 October 2022
• DOI: http://doi.org/10.1002/jcaf.22572

Received:  April  Accepted:  May 

DOI: ./jcaf.

RESEARCH ARTICLE

Theories applicable to corporate climate change disclosure

Ying Guo1Joanna (Jingwen) Zhao2David C. Yang3

Department of Accounting, College of

Business and Economics, California State

University, East Bay,Hayward, California,

USA

Department of Accounting, College of

Business and Economics, California State

University, Los Angeles, Los Angeles,

California, USA

Department of Accounting, Shidler

College of Business, University of Hawaii

at Manoa, Honolulu, Hawaii, USA

Correspondence

Joanna (Jingwen) Zhao, Assistant

Professor, Department of Accounting,

College of Business and Economics,

California State University, Los Angeles,

Los Angeles, CA , USA.

Email: jzhao@calstatela.edu

Abstract

Increasing public attention to climate change has led to many studies to investi-

gate the impact of climate change in various fields. However,the topic demands a

further thorough examination of the impact of climate change on firms’ account-

ing behavior, such as firm disclosure. There are currently no mandatory U.S.

accounting standards issued by accounting standards-setting bodies such as the

FASBor SEC on reporting the impact of climate change on firms’ business. How-

ever, firms have started to report the impact of climate change on a voluntary

basis. In order to help academia, professionals, and investors better understand

voluntary climate change disclosure, this study surveys theories of corporate

accounting disclosure related to corporate social responsibility and environmen-

tal reporting, particularly in the areas of voluntary climate change disclosure.

This study integrates multi-dimensional corporate climate change disclosure

theories to help future policymakers, investors, and other stakeholders provide

appropriate corporate climate disclosure theoretical assistance and respond to

the government and society’s calls for a low-carbon economy.

KEYWORDS

climate change, corporate disclosure, sustainability accounting, environmental accounting,

climate disclosure theories

1 INTRODUCTION

One of the biggest threats facing society and organizations

today is related to climate change (Burke et al., ).

Climate change is a controversial topic. Some policymak-

ers and media reporters have been questioning whether

global warming is actually happening and, if it exists,

whether those changes are caused by human activities.

Climate change has become not only an ecosystem

issue but also a political issue; however, it should first

be treated as a scientific issue. On the molecular level,

greenhouse gas molecules absorb infrared photons from

sunlight radiation through transitions between their

different vibrational-rotational levels, transitions which

are allowed by the quantum selection rule. On the macro-

level, this absorption of infrared radiation occurring in

the atmosphere stores the heat from the earth. The earth

balances the concentration of greenhouse gases (GHGs)

in the atmosphere naturally through processes such as

the carbon cycle, so that the earth’s temperature remains

not too hot or too cold. However, human activities have

produced a significant amount of GHGs in a short period,

more than our ecosystem can remove or recycle quickly,

resulting in a rapid accumulation of GHGs in the atmo-

sphere. As a result of this accumulation, the earth’s overall

surface temperature is increasing. The direct impact of this

effect is ice melting, sea-level rise, and more air moisture,

leading to stronger air currents and storms. In addition

to severe droughts, heat waves, and wildfires directly

caused by the increased surface temperature of the earth,

indirect consequences may be extremely cold weather and

snowstorms.

J Corp Account Finance. ;:–. © Wiley Periodicals LLC. 147wileyonlinelibrary.com/journal/jcaf