Climate risk and environmental accounting in a world of change

This special issue examines the relationship between climate risk and environmental accounting, focusing on corporate reporting and disclosures. Climate risk, driven by natural disasters, shifting weather patterns, and policy changes, significantly impacts corporate operations and performance. Stakeholders, including policymakers, investors, and regulators, demand robust climate risk governance, supported by frameworks like the Paris Agreement, TCFD recommendations, and mandatory disclosure requirements in the UK and New Zealand. Companies are responding by adopting net-zero business models and revising traditional environmental accounting practices. Corporate environmental disclosure (CED) is crucial for communicating climate risks and mitigation endeavours, although voluntary initiatives such as the Carbon Disclosure Project face challenges in achieving data credibility and comparability. In support of these initiatives, this issue features five papers exploring various facets of climate risk and environmental accounting. The first paper introduces a model for evaluating corporate risk reporting using the DEMATEL-ANP approach. The second analyses the determinants of ESG disclosure in Hong Kong, highlighting the effects of voluntary versus mandatory reporting. The third investigates how market-based regulations influence corporate carbon disclosure and performance across industries. The fourth uses a fuzzy decision-making model to assess European eco-management practices to guide environmentally conscious energy investments. The fifth reviews the literature on corporate social responsibility decoupling (CSRD), discussing its drivers, consequences, and implications. Together, these studies offer comprehensive insights into how firms are addressing climate risk through environmental accounting and reporting, providing valuable guidance for policymakers, investors, and managers to improve transparency and accountability in sustainability practices.