Greenhouse Gas Disclosure Research: A Look Back and a Look Forward

Regulators have increased ESG disclosure requirements, particularly for climate risk. The SEC's 2022 proposal emphasizes the material impact of climate risks on financial performance. Research shows a negative link between emissions and equity value, supporting the SEC's stance. Two studies show that investors value emissions strategies differently based on a firm's ESG performance. Scope 3 disclosures remain complex and costly, raising concerns about greenwashing and potential regulatory consequences.