Integrating Carbon Footprint Accounting into Corporate Financial Reporting: Evidence from Global Manufacturing Firms
Main article
Abstract
As global environmental concerns intensify, the integration of carbon footprint accounting (CFA) into corporate financial reporting has become an essential step toward achieving transparent and sustainable business practices. This study investigates how global manufacturing firms incorporate carbon footprint data into their financial reports and examines the implications for corporate performance, investor perception, and regulatory compliance. Using a dataset of 320 publicly listed manufacturing companies across North America, Europe, and Asia from 2015 to 2023, we employ panel regression models and content analysis to evaluate the relationship between the extent of CFA disclosure and key financial indicators such as profitability, cost efficiency, and market valuation. The results reveal that firms with higher-quality carbon disclosure exhibit stronger long-term financial performance and improved investor trust, particularly in regions with stringent environmental regulations. Moreover, integrating CFA into financial reporting enhances comparability and accountability, fostering a closer alignment between environmental sustainability and corporate financial strategies. This research contributes to the emerging literature on environmental accounting by providing empirical evidence of how carbon accounting integration can serve as both a compliance mechanism and a strategic driver for sustainable value creation.
