Unmasking Strategic Disclosure: Evidence from Voluntary Corporate Carbon Disclosures.

Information intermediaries have emerged as credible institutions for voluntary corporate disclosures of non-financial performance. However, some studies have shown that these disclosure mechanisms do not always lead to corresponding improvements in firm performance, raising concern regarding actual transparency provided by firm disclosures. This study seeks to demonstrate whether firms leverage the credibility of voluntary disclosure mechanisms to increase competitive advantage without substantive improvements in performance. We employ multiple empirical methods to detect evidence of strategic disclosure within one prominent mechanism (CDP, or Carbon Disclosure Project). Results indicate that firms tend to provide misleading performance disclosures in order to maximize scores without substantive performance improvements. The study contributes to our understanding of strategic voluntary disclosure and seeks to inform improved design of third party disclosure institutions. [ABSTRACT FROM AUTHOR]