Corporate carbon management system quality and voluntary carbon assurance: the moderating effect of institutional setting

This study examines the relationship between voluntary carbon assurance (VCA) and carbon management system quality (CMSQ). Using a sample representing more than 40 countries over the period 2011–2018, we show empirically that firms with superior CMSQ tend to adopt VCA to show their commitment to a green transition to a decarbonised business model. Furthermore, the institutional context has a significant influence on this relationship. More specifically, the relationship between CMSQ and VCA is stronger in carbon-intensive sectors. In addition, the existence of an emissions trading scheme and better governance also strengthen the association. However, the relationship is weaker in companies that operate in developing countries and in code-law countries compared to common-law countries. The results are robust to alternative proxies and various model specifications. Our study yields important insights for policymakers, managers and researchers. Specifically, by identifying the factors that motivate firms to adopt VCA, stakeholders can develop more robust policies to promote both VCA and high-quality carbon management systems.