Information Disclosure in the Context of Combating Climate Change: Evidence from the Chinese Natural Gas Industry

Abstract

Natural gas (NG) is a key transitional energy source for clean energy transition. Against the backdrop of a grim climate change situation, the sustainable development of the Chinese NG industry is emphasized. Climate change disclosure (CCD) has become an important way for corporations to fulfill their social responsibility and demonstrate their capacity for sustainable development. In order to understand the current status of CCD in the Chinese NG industry and to improve the deficiencies, this paper assesses the quality of CCD in the Chinese NG industry. Climate change information is not fully covered by the existing quality evaluation systems. This study establishes a highly applicable system for evaluating the quality of CCD based on the theory pillar perspective. It includes the following five dimensions: completeness, balance, reliability, comparability, and understandability. This study evaluates the quality of CCD of 58 NG corporations using content analysis and quality evaluation index methods, incorporating Skip-Gram and CRITIC models. The evaluation results indicate that the quality of climate reports in the Chinese NG industry has shown general improvement over time; however, inconsistencies remain, making comparisons challenging. There are differences in the level of quality of CCD in the Chinese NG industry. Policy incentives with clear guidance and regional economic development conditions have a notable impact on the quality of CCD. For Chinese NG corporations themselves, disclosing climate change information related to risk management is the focus of narrowing the reporting gap. The CCD quality evaluation system constructed in this paper provides a theoretical reference for all industries to accurately promote disclosure quality. It also provides practical guidelines for corporations to identify weak links in CCD.