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Carbon Emissions, Carbon Reporting Channels and Corporate Debt: Evidence from Developed and Emerging Markets

Lookup NU author(s): Dr David RirimasseORCiD

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This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).

Abstract

We investigate the impact of carbon emissions intensity on debt proceeds and the cost of debt. We compare top emitters in developed markets with established mandatory emissions reporting frameworks (US and UK) against major emitters in emerging markets (China and India), serving as an implicit test for the efficacy of mandatory versus voluntary carbon emissions disclosures and the role of universally accepted vendors. Our findings indicate: (i) higher carbon intensity enhances debt capital in developed markets while suppressing it in emerging markets; (ii) increased carbon intensity in developed markets is associated with a higher cost of debt; and (iii) in developed markets, investors incorporate firm-reported emissions in their lending decisions, while in emerging markets, vendor-estimated emissions are considered more reliable. These findings underscore the significance of carbon emissions reporting in shaping financial outcomes. For developed markets, stringent reporting standards enhance transparency and investor confidence. In emerging markets, reliance on vendor-estimated emissions suggests a need for improved reporting mechanisms.

Publication metadata

Author(s): Ririmasse D, Tsitsianis N, Mitrou E

Publication type: Article

Publication status: Published

Journal: Emerging Markets Finance and Trade

Year: 2025

Pages: epub ahead of print

Online publication date: 24/10/2025

Acceptance date: 03/10/2025

Date deposited: 23/01/2026

ISSN (print): 1540-496X

ISSN (electronic): 1558-0938

Publisher: Routledge

URL: https://doi.org/10.1080/1540496X.2025.2573435

DOI: 10.1080/1540496X.2025.2573435

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