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MANDATORY GREENHOUSE GAS (GHG) EMISSION DISCLOSURES:

GHG REPORTING FOR ACCOUNTING AND FINANCE
PROFESSIONALS

Ha Thi Ngoc Ha 153 , Tran Khanh Lam
154

Abstract: This study explores the significance of mandatory greenhouse gas (GHG) emission
disclosures for accounting and finance professionals. It highlights the growing importance of GHG
reporting in financial statements, emphasizing the impact of carbon pricing on corporate valuation and
risk management. The research employs a systematic literature review, analyzing studies on GHG
reporting frameworks, investor expectations, and the role of financial experts in ensuring compliance
with climate-related disclosure standards. The results underscore the necessity of standardized GHG
disclosures for accurate risk assessment and transparent financial reporting. Additionally, the study
discusses the integration of GHG metrics into financial decision-making processes, stressing the
importance of collaboration between finance and sustainability teams. This research is significant as it
provides a strategic roadmap for accounting professionals to align GHG reporting with financial
systems, thereby enhancing the credibility of corporate sustainability efforts and fostering investor
confidence in a carbon-conscious economy.
Keywords: GHG, sustainable development, reporting, accounting, finance

1. Introduction

The increasing awareness of climate change and its impact on the global economy
has led to significant changes in regulations, particularly regarding mandatory
greenhouse gas (GHG) emission disclosures. The connection between environmental
sustainability and financial accountability has become increasingly apparent, with
regulators and stakeholders demanding greater transparency in corporate environmental
performance. As noted by Depoers, Jeanjean, and Jérôme (2016), the integration of

environmental information into financial reporting has gained importance, especially as
businesses are held accountable for their role in mitigating climate risks. These
mandatory GHG disclosures aim not only to provide investors, consumers, and
policymakers with a clearer understanding of a company’s environmental impact but
also to encourage actions aligned with global climate goals (Baldassarri Höger von
Högersthal et al., 2020).
From a theoretical perspective, the relationship between GHG emissions and
corporate financial performance is well-established. Research has shown that carbon

pricing and emission reductions can significantly influence a company's valuation,
introducing new variables in risk assessment and profitability projections (Tang et al.,
2022). Mandatory disclosures serve as a tool for transparency, influencing corporate
strategies to manage reputational and financial risks associated with non-compliance
(Talbot & Boiral, 2018). Practical implications highlight the critical role of finance

professionals in ensuring the accuracy of GHG data, which is essential for external
assurance and compliance with emerging standards (Wendy & Zhou, 2013).

153 Vietnam Association of Certified Public Accountants (VACPA), Email: hangocha@vacpa.org.vn
154 Vietnam Association of Certified Public Accountants (VACPA)
291