Growth opportunity and climate change disclosure (CCD): the moderating effect of green financing

What the paper says

Purpose The purpose of this paper is to examine the association between growth opportunity and climate change disclosure (hereafter CCD) and whether this relationship is moderated by green bond finance in the US setting. Design/methodology/approach The sample comprises 6,048 firm-year observations over the period of 2010–2023. CCD is assessed using three proxies: a binary indicator of scope 1, 2 and/or 3 emissions disclosure; a 0–3 scoring for the disclosure quality; and a proportional score disclosure ratio. Market-to-book ratio measures growth opportunities, and green bond issuance operationalises green financing. Hypotheses are tested using robust panel regressions and moderation analysis. Findings The findings of this study indicate that corporate growth opportunities positively affect the CCD, thereby enhancing the company’s environmental reporting. In addition, results from the moderating effect show that green financing, measured by green bond issuance, enhances the effect of growth opportunities on CCD. Practical implications This study offers new insights for managers to align growth strategies with climate accountability, for policymakers to promote green financing and for investors to prioritise companies that balance profitability with environmental limits. Mandating Scope 3 disclosures and expanding green bond frameworks are essential for enhancing this synergy. Originality/value This research enhances the discussion on sustainable corporate and climate disclosure by empirically investigating the effect of growth opportunities on CCD. This study also looked at how green financing influences this relationship, creating a useful model for companies worldwide to balance making profits and being environmentally responsible.