Voluntary carbon assurance and the cost of equity capital : international evidence

Rina Datt; Le Luo; Reuben Segara

doi:10.1177/03128962241251498

Voluntary carbon assurance and the cost of equity capital : international evidence

Rina Datt
, Le Luo
, Reuben Segara

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

Abstract

We examine the impact of voluntary carbon assurance on a firm's cost of equity capital (COE). Based on 6500 firm-year observations across 44 countries covering a period of 8"‰years (2010-2017), we find that the adoption of carbon assurance is negatively associated with the COE. Cross-sectional analyses show that the negative relationship is stronger for firms with poor emissions reduction performance and for firms that do not participate in an emissions trading scheme. We also find that a country's legal institutions and economic development have significant moderating effects on this relationship. Furthermore, the scope and the percentage of carbon emissions assured, the level of carbon assurance, and the auditing standards adopted have varied effects on the COE. These findings should be useful to regulators, managers, and investors looking to improve the credibility of voluntarily reported information.

Original language	English
Pages (from-to)	1129-1165
Number of pages	37
Journal	Australian Journal of Management
Volume	50
Issue number	4
DOIs	https://doi.org/10.1177/03128962241251498
Publication status	Published - Nov 2025

Bibliographical note

Publisher Copyright:
© The Author(s) 2024. This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page (https://us.sagepub.com/en-us/nam/open-access-at-sage).

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth
SDG 13 Climate Action

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Cite this

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Voluntary carbon assurance and the cost of equity capital : international evidence

Abstract

Bibliographical note

UN SDGs

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