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Abstract

While plant-level mandatory climate disclosure is a common regulatory approach worldwide, investors and other stakeholders demand firm-level data to better assess climate risks and make informed decisions. Given the wedge between plant-level information provision and firm-level information demand, the impact of the plant-level disclosure mandates on broader corporate transparency remains underexplored. Prior literature mainly explores the informational consequences of firm-level disclosure mandates, leaving a gap in the informational impact of subunit-level disclosure. This study examines how plant-level mandatory climate disclosure affects corporate transparency by shaping firm-level voluntary environmental disclosure. Using the US Greenhouse Gas Reporting Program (GHGRP) that requires certain plants to disclose climate data and employing a difference-in-differences design, this dissertation finds that treated firms are 9.3 to 25.5 percent more likely to voluntarily disclose firm-wide environmental data post-regulation. This disclosure enhancement effect is more pronounced among firms with greater exposure to the GHGRP, those exhibiting larger improvements in environmental performance, and those facing higher external environmental pressure or greater plant-level information uncertainty. Mechanism analyses suggest that the environmental performance channel and the external information mechanism play a more substantial role in facilitating voluntary environmental reporting, while mere measurement, without public disclosure, is insufficient to prompt firms to increase their voluntary disclosure. However, despite increases in disclosure quantity, there is no significant improvement in disclosure credibility or environmental performance. These findings raise concerns about potential opportunistic disclosure behavior and underscore the limitations of plant-level mandates in enhancing corporate transparency. The dissertation contributes to the literature by providing novel empirical evidence on how subunit-level disclosure mandates affect firm-level voluntary disclosure decisions. It also deepens our understanding of disclosure theory by demonstrating that reductions in perceived information asymmetry, particularly from the investor’s perspective, are key to triggering voluntary reporting. Finally, the findings inform ongoing policy debates, suggesting that while plant-level mandates may incentivize more disclosure, they are insufficient to ensure firm-level information reliability or environmental impact. Overall, this study offers implications for researchers studying disclosure dynamics, regulators assessing policy effectiveness, and investors seeking accountability in sustainability.