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<p>The present study aims to examine whether the extent of climate change-related disclosure has an impact on a firm’s value. More specifically, this paper has analyzed the level of compliance with climate change-related corporate disclosures following the recommendations provided by the Task Force on Climate-related Financial Disclosures (TCFD) and its impact on the firm’s value. The present paper has considered the 39 largest non-financial companies from the NIFTY 50 Index. To measure the level of climate change-related disclosures of the sample companies, the study has examined the compliance level of climate change-related information disclosed in the Sustainability Reports/Integrated Reports/ESG Reports annually, with the help of content analysis method and thereby evaluated the Climate Compliance Index (CCI) score of each company for the periods of 2019–2020 to 2022–2023 following the TCFD recommendations. After that, to assess the impact of climate change-related disclosures in terms of CCI scores on the value of the firms measured by Tobin’s Q, we initially employed the ordinary least square model after that to get more unbiased results we also used generalized least square method of regression analysis. The results revealed that the compliance level of climate change-related disclosure following the TCFD recommendations is moderate but increased as compared to the previous study period in the case of select Indian companies. Our empirical result demonstrated that climate change-related disclosures are negatively associated with firms' valuation measures, such as Tobin’s q. The present study significantly contributed to the existing body of literature by investigating the status of climate change-related reporting practices and their impact on the value addition of Indian-listed companies, as very few studies have attempted to examine the said relationship from the perspective of Indian companies. The results have significant implications for the corporate managers, governments, and policymakers who strategize their policies in line with the net-zero target and long-term sustainability.</p>

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Climate-related financial disclosures and firm value: evidence from India

  • 期刊论文

  • 发表日期：

    2025年4月20日

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  • Amitava Mondal,
  • Somnath Bauri

摘要

The present study aims to examine whether the extent of climate change-related disclosure has an impact on a firm’s value. More specifically, this paper has analyzed the level of compliance with climate change-related corporate disclosures following the recommendations provided by the Task Force on Climate-related Financial Disclosures (TCFD) and its impact on the firm’s value. The present paper has considered the 39 largest non-financial companies from the NIFTY 50 Index. To measure the level of climate change-related disclosures of the sample companies, the study has examined the compliance level of climate change-related information disclosed in the Sustainability Reports/Integrated Reports/ESG Reports annually, with the help of content analysis method and thereby evaluated the Climate Compliance Index (CCI) score of each company for the periods of 2019–2020 to 2022–2023 following the TCFD recommendations. After that, to assess the impact of climate change-related disclosures in terms of CCI scores on the value of the firms measured by Tobin’s Q, we initially employed the ordinary least square model after that to get more unbiased results we also used generalized least square method of regression analysis. The results revealed that the compliance level of climate change-related disclosure following the TCFD recommendations is moderate but increased as compared to the previous study period in the case of select Indian companies. Our empirical result demonstrated that climate change-related disclosures are negatively associated with firms' valuation measures, such as Tobin’s q. The present study significantly contributed to the existing body of literature by investigating the status of climate change-related reporting practices and their impact on the value addition of Indian-listed companies, as very few studies have attempted to examine the said relationship from the perspective of Indian companies. The results have significant implications for the corporate managers, governments, and policymakers who strategize their policies in line with the net-zero target and long-term sustainability.