The Impact of Changes in Carbon Emissions on Firm Value: Focusing on Voluntary Disclosure of Water Resources

This study investigates how changes in carbon emissions influence firm value and the extent to which voluntary water resource disclosure ‎moderates this relationship. Analyzing a sample of 702 South Korean listed firms from 2017 to 2021, increases in carbon emissions are ‎negatively associated with firm value, signaling to the market potential operational inefficiencies or heightened regulatory risk in a carbon-constrained economy. More critically, our findings reveal a significant moderating effect of voluntary water disclosure. This suggests that ‎transparent water reporting allows firms to contextualize their carbon performance, mitigating the adverse valuation impact of rising ‎emissions by signaling a holistic commitment to environmental responsibility. From a signaling theory perspective, this integrated ‎transparency reframes investor perceptions, transforming isolated emission concerns into components of a broader, more credible ‎sustainability narrative, thereby reinforcing stakeholder trust and offering a strategic pathway to enhancing firm value amidst environmental ‎challenges‎.