Determinants of GHG Reporting: An Analysis of Global Oil and Gas companies

Reporting on climate change is an area of increasing academic interest within the sustainability reporting literature. While existing studies focus mainly on internal factors as determinants of GHG reporting, fewer studies have focussed on the contextual factors which may determine the GHG reporting practices of multinational companies. Using a combination of strategic and institutional legitimacy theory along with stakeholder theory the context in which multinational oil and gas companies operate is examined to determine whether this influences the quality and quantity of GHG reporting. It is found that participation in the EU Emissions Trading Scheme (EU ETS) and reporting according to the GRI guidelines influence both the quality and quantity of GHG reporting. European location and corporate visibility in the media were not found to be significant determinants of reporting. The results of the study provide some support for both the institutional and strategic legitimacy arguments as it is found that companies respond to political and societal pressures on climate change using GHG reporting. The paper also calls for further research into the link between climate strategy and GHG reporting as well as research into the issue of stakeholder salience and sustainability reporting.