Carbon Emissions Disclosure Practices: A Comparative Study of Consumer Discretionary and Consumer Staples Sectors in Sri Lanka

Abstract

The research paper focuses on the degree of carbon emission disclosure by companies in the Consumer Discretionary and Consumer Staple industry of the Colombo Stock Exchange (CSE) in Sri Lanka. As the world is increasingly focused on environmental transparency and climate responsibility, it is necessary to gain insight into the disparities in disclosure practices across the various sectors especially in the emerging economies where regulatory frameworks are not well-developed. A quantitative and cross-sectional research design was adopted and secondary data were collected through annual reports of 48 randomly selected companies during the 2023/2024 financial year. The Carbon Emissions Disclosure Index (CEDI) was designed using an 18-item questionnaire, which was created through the Global Reporting Initiative (GRI) Standards and previous literature. The scoring of each disclosure item was done in a binary manner, which renders objectivity and consistency in its measurement. The normality tests, such as Shapiro Wilk and Kolmogorov Smirnov tests, revealed that the data were not normally distributed; hence, the non-parametric Mann Whitney U test was used in order to determine the difference of carbon emission disclosure practices in the two sectors. The results indicate no statistically significant difference in the disclosure of carbon emission between Consumer Discretionary and Consumer Staples companies, suggesting that sectoral classification does not significantly influence disclosure practices in the Sri Lankan context, and that the disclosure levels of companies in both industries are relatively similar. The paper is a contribution to the scanty empirical data available on the disclosure of carbon emissions in emerging markets, given that the article presents sector-specific comparative evidence in Sri Lanka. It also presents some useful implications to the policymakers, as it points to the necessity of more effective regulatory frameworks and standardized reporting principles to increase transparency and comparability across industries. Further studies can expand this investigation by adding the number of sectors, long-term data, and the qualitative measurement of the quality of disclosure.