Primary or secondary? Investor reactions to scope 3 emissions disclosure and the role of blockchain verification
Pianpian Huang · 2025
With the mandatory scope 3 emissions disclosure underway, standard setters are concerned about the quality of these disclosures. They urge firms to prioritize collecting primary data from suppliers over secondary data estimated from industry averages. Meanwhile, blockchain has been proposed as a reporting system for collecting emissions data from suppliers. This study examines the joint effect of data origin and reporting system in upstream scope 3 emissions disclosure on investors’ judgments. I find under bad emissions performance, investors assign higher valuation judgments when the firm discloses a high (versus low) primary data percentage, but only when the reporting system is survey rather than blockchain. Conversely, under good emissions performance, the same valuation effect is observed when the reporting system is blockchain rather than survey. Further analysis shows these effects are driven by investors’ perceived management intention and blockchain’s verification value. The findings provide practical implications for standard setters and managers.