A slow and deceitful path to decarbonization? Critically assessing corporate climate disclosure as central tool of soft climate governance

Abstract

Companies increasingly disclose climate information via voluntary frameworks and emerging mandatory reporting regimes. However, corporations remain large contributors to the increase of global CO2 emissions. Researchers have identified major flaws in corporate climate reporting, yet a more fundamental critique is necessary to understand climate reporting's potential and limitations for decarbonizing the economy. The dominant approach in current polycentric, multi-level, and transnational climate governance is soft climate governance. This article presents a critical discussion of disclosure as a tool of soft climate governance and argues that a climate disclosure regime has spread across the global economy. Though subtle and hard to grasp, this regime is powerful in normalizing corporate climate disclosure across countries and industries. It constitutes a distinct social construction and offers companies two resources: a business-compatible theory of change and a structured climate governance approach. Through an in-depth qualitative analysis of ten companies from Germany, Brazil, and the United States, this article conceptualizes climate disclosure as a formalized practice of valuation. While successful in translating climate change into business language, the climate disclosure regime currently does not enable a rapid transformation of the economy. The article offers an innovative explanation for the limited effects of climate disclosure on reducing corporate greenhouse gas emissions, but avoids a destructive critique that dismisses climate disclosure as mere greenwashing activity. Simultaneously, it counters naïve illusions that more transparency, better standards, and the right performance indicators will solve the “wicked problem” of climate change.