GHG Emissions Performance: Alternative Accounting Approaches for European Union
GHG Emissions Performance: Alternative Accounting Approaches for European Union

Summary/Abstract: This study provides evidence on the probability of adopting an accounting approachfor emission allowances and greenhouse gas emissions as a function of each company’sGHG emissions performance. The different accounting treatments adopted by nationalstandard-setters and the lack of specific guidance from the International AccountingStandard Board (IASB) allow identification of the use of multiple accounting approaches.Based on a sample of 85 companies registered with the Portuguese, Spanish, and FrenchNational Plans of Allocation, data collected from the annual reports were analysedfor the period 2008–2014. The results suggest that the probability of adopting omissionstrategies is positively associated with better GHG emissions performances. It addressesthe importance of introducing the transactions of the European Union Emissions TradingScheme (EU ETS) in financial reporting as the visibility of the costs of polluting is oneof the purposes of the market mechanism.

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