Abstract

Corporate carbon performance (CCP) has become a central topic in political, financial, and academic domains. At the same time, several characteristics of CCP data, including comparability and consistency, remain unresolved. The literature has extensively covered issues regarding the comparability of CCP data from a firm-internal perspective. However, it has not yet examined the consistency of CCP data between third-party data providers. This article investigates the degree of CCP data consistency between third-party providers according to three dimensions: scope (i.e., direct and indirect emissions), scheme (i.e., mandatory and voluntary reporting schemes), and source (i.e., data stemming from corporate reports and from third-party estimation methods). The results reveal that data on direct emissions are more consistent than data on indirect emissions, and they are especially inconsistent for Scope 3. Second, mandatory and voluntary reporting schemes do not substantially improve the consistency of CCP data, which is surprising. Third, third-party estimations are less consistent as compared to data stemming directly from corporate reports; however, the combination of Scopes 1 and 2 third-party estimated data raises consistency levels. On the basis of these results, we conclude the following key implications: academic researchers must be mindful of the consistency of CCP data, because it can significantly affect empirical results, corporate management should avoid situations where different CCP data are communicated externally, investors should engage firms to follow a standardized approach, data providers should increase the transparency about their estimation methods, and policy makers need to be aware of the importance of a sound and standardized methodology to determine CCP.

Scientific Portfolio AI- Generated Summary

The paper “Corporate carbon performance data: Quo vadis?” explores the consistency of corporate carbon performance (CCP) data provided by third-party sources. The authors address the unresolved characteristics of CCP data, particularly focusing on comparability and consistency. They note that while the literature extensively covers issues regarding the comparability of CCP data from a firm-internal perspective, the consistency of CCP data between third-party providers has not been thoroughly examined.

The study investigates the degree of CCP data consistency across three dimensions: scope, scheme, and source. Scope refers to direct and indirect emissions, scheme pertains to mandatory and voluntary reporting schemes, and source encompasses data from corporate reports and third-party estimation methods.

The findings of the study reveal several key points. First, the data on direct emissions are more consistent than data on indirect emissions, with particularly notable inconsistencies for Scope 3 emissions. This suggests that there are challenges in accurately capturing and reporting indirect emissions across different sources.

Second, the study indicates that both mandatory and voluntary reporting schemes do not substantially improve the consistency of CCP data. This finding is surprising and highlights the need for further exploration into the factors influencing data consistency across different reporting schemes.

Third, the source of the data, whether from corporate reports or third-party estimation methods, also impacts the consistency of CCP data. Understanding the implications of these different data sources is crucial for stakeholders relying on CCP data for decision-making and analysis.

The implications of these findings are significant for policymakers, financial analysts, and researchers interested in corporate carbon performance. The study underscores the need for improved consistency and comparability of CCP data, especially in the context of indirect emissions and across different reporting schemes. Addressing these challenges is essential for enhancing the reliability and usefulness of CCP data for various stakeholders.

In summary, the paper provides valuable insights into the current state of CCP data consistency and highlights areas that require further attention and research. By shedding light on the unresolved characteristics of CCP data, the study contributes to the ongoing discourse on corporate carbon performance and its implications for sustainability, financial analysis, and policy development.