The politics of carbon disclosure as climate governance

The rapid growth in carbon disclosure in recent years represents a major success in the struggle to build awareness and action on climate change. Despite the Copenhagen debacle and Congressional inaction in the US, the measurement and reporting of carbon emissions at the product, facility and organization levels display considerable momentum. The growth of carbon disclosure is the result of three core drivers: regulatory compliance, pressure from non-governmental organizations (NGOs) and managerial information systems intended to facilitate participation in carbon markets, reduce energy costs and manage reputational risks. In this essay, we argue that the strategies pursued by 'institutional entrepreneurs' have played a key role in the successful institutionalization of carbon disclosure by bringing together companies, NGOs and government agencies. The Carbon Disclosure Project (CDP), in particular, has displayed strategic skill in presenting the project in ways that appeal to multiple stakeholders and building broad legitimacy for reporting standards. Some 3000 organizations in 66 countries around the world now measure and disclose their emissions and climate strategies through CDP (Price Waterhouse Coopers, 2010). Carbon disclosure has become an important institution of governance, raising awareness about climate change, clean energy and energy efficiency, while generating legitimacy for the principle of external accountability. Most importantly, the rise of voluntary carbon disclosure has demonstrated to business the feasibility and potential benefits of carbon measurement and reporting, such as management of reputation and energy costs. In turn, this has opened political space for regulatory initiatives that mandate disclosure and formalize carbon accounting standards. Despite the rapid uptake of carbon disclosure, there are some troubling questions about the trajectory along which the institution is evolving and its ultimate impact. Tensions exist between two 'institutional logics', a corporate logic of carbon risk management and carbon trading, and an NGO-oriented logic based on transparency and accountability. We argue that the field is drifting toward a more corporate logic, and that while this enhances the diffusion of disclosure, it also weakens it as a tool for driving the substantial cuts in greenhouse gas (GHG) emissions needed to address climate change. Our analysis also highlights that building new institutions requires not just discursive strategies to frame issues in a particular way, but also political and economic strategies