The reporting of company-wide greenhouse gas (GHG) emissions is a complex undertaking for companies and currently a voluntary activity in most European countries.

As a result of this voluntary nature, and despite the availability of reporting guidelines to assist companies with reporting, GHG-emissions data currently reported by companies is often incomplete, thus making it difficult for stakeholders to draw comparisons between companies’ climate change performance.

Liesen, Andrea and Hoepner, Andreas G. F. and Patten, Dennis M. and Figge, Frank, Corporate Disclosure of Greenhouse Gas Emissions in the Context of Stakeholder Pressures: An Empirical Analysis of Reporting Activity and Completeness (August 9, 2013). Available at:

The empirical study by Liesen et al. analyses GHG-emissions disclosures by companies in Europe over a five year period. Based on the requirements of the three most dominant reporting guidelines, i.e. the GHG Protocol, the Carbon Disclosure Project and the Global Reporting Initiative, the authors categorise corporate GHG-emissions disclosures according to the level of completeness concerning:

  • the scope of emissions (i.e. do companies report scope 1 emissions (from internal corporate activities and scope 2 emissions (electricity purchases);
  • the type of emissions (i.e. do companies report all greenhouse gases – or only CO2-emissions?);
  • the reporting boundary (i.e. do companies report emissions for their group-wide activities - or only for subset of operations?).

Next to evaluating the completeness of corporate GHG emissions disclosure across Europe, the study also sought to understand the influence of external stakeholders on disclosure decisions, finding evidence that stakeholder pressure can lead to GHG reporting. However no relationship was found between stakeholder pressure and the comprehensiveness of GHG reporting, suggesting that some corporate disclosure is a token effort to try and appease stakeholder groups.


The study covers a sample of 431 European companies over the years 2005 to 2009. Financial data was drawn from a standard industry source, Thomson Reuters Datastream, while emissions data was extracted from 4,000 company reports and websites, while using the CDP as a secondary data source.

The analysis of stakeholder pressure focused on four key stakeholder groups - the state, non-governmental organisations (NGOs), providers of capital, and the public - identified by a proxy measure to represent the influence of each one:


  • Represented by the implicit energy tax level of a company’s home country. Governments can use energy taxes as a tool to influence corporate activity, so companies in countries with a higher energy tax might be expected to be more likely to report their GHG emissions data publicly to respond to this pressure.


  • Represented by the frequency that a company is mentioned in negative NGO press releases about climate change. Companies that have been publicly targeted on climate related issues may be more likely to report on their environmental performance in response to these pressures.

Capital providers

  • Represented by the proportion of institutional owners, with the expectation that companies with more concentrated shareholder base are likely to come under greater pressure to disclose environmental performance, and by the leverage ratio (total debt to common equity), with the expectation that greater borrowing increases expectations from external creditors that a company reports on social and environmental issues.

The public

  • Represented by each industry’s relative impact on global warming. Companies in high impact industries come under greater public scrutiny and may be more likely to disclose their performance to answer to stakeholder pressure.

The statistical analysis also controlled for effects that are expected to impact a company’s ability to report, such as company size, profitability, membership in the European Emissions Trading Scheme and membership in the UN Global Compact.


The proportion of companies in the study disclosing absolute numbers of GHG emissions for at least the majority of corporate activities data rose from 52% in 2005 to 71% in 2009. However, the proportion of companies whose reporting was considered complete remained low at around 15% across the period, although the figure was trending slowly upwards. In 2009, the last year under analysis, the scope of emissions was the most comprehensively reported area, while approximately only half of the companies reported on other GHGemissions than CO2 or reported emissions on what was considered group-wide corporate activities.

The evidence for stakeholder influence on the existence and completeness of reporting was split: While results of the statistical analysis suggested that pressures from some stakeholder groups seem to have influenced the decision to report, there was no evidence that stakeholder pressure had a significant effect on the completeness of such disclosures.


The results of the study indicate that pressure from the state, NGOs and the public impact a corporations’ decision to report GHG emissions data, but pressure from equity investors and debt lenders does not. At the same time, stakeholder pressure does not influence the extent of the reporting, with very few companies disclosing what is considered complete information. The authors infer from these results that some companies use the reporting of some GHG-emissions with the aim to gain legitimacy or deflect criticism rather than genuinely informing stakeholders.

The authors further conclude that with such a low proportion of companies reporting complete information, the data offers only limited usefulness in calculating GHG performance unless investors carefully assess data validity before usage. The low level of complete disclosure also suggests that despite the longstanding efforts from the side of voluntary reporting guidelines, the goal to generate comparable emissions reporting across companies is not yet achieved. The authors propose that either more direct stakeholder pressure or a mandatory reporting regime is needed to achieve complete and comparable disclosures of corporate GHGemissions.

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    RI Quarterly Vol. 4: Focus on climate

    September 2014