Does Going Green Change the Numbers? Carbon Footprint Certification, Corporate Governance, and Firm Outcomes in Thailand

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ABSTRACT Voluntary environmental certification is often assumed to signal broader improvements in corporate accountability, including financial reporting quality. This study tests that assumption using Thailand's Carbon Footprint for Organization (CFO) certification, a third‐party‐verified carbon‐accounting scheme administered by the country's Greenhouse Gas Management Organization. We ask whether certification is associated with earnings quality and financial performance among Stock Exchange of Thailand‐listed non‐financial firms, and whether firm‐level corporate governance moderates this relationship. Using a staggered difference‐in‐differences design on a propensity‐score‐matched panel of 409 firms over fiscal years 2013–2024, we triangulate four estimators of increasing robustness to bias—a naive baseline, stacked two‐way fixed effects with contaminated comparisons removed, and two heterogeneity‐robust staggered‐adoption estimators—so that our conclusions do not rest on any single method's assumptions; governance moderation is tested using a hand‐collected, seven‐component governance index measured before certification. Certification shows no detectable effect on earnings management, accrual quality, or accounting profitability, and interval and equivalence tests rule out effects larger than roughly 0.3 standard deviations for each outcome. Market valuation is the one exception: certified firms show a positive association with Tobin's Q , but this result is weak and specification‐dependent, and does not survive alternative comparison groups or multiple‐testing adjustment. Governance moderation is likewise exploratory: a few raw signals emerge when governance is measured before certification, but none survives correction for multiple testing. These patterns are consistent with certification that is genuinely implemented yet decoupled from internal financial‐reporting behavior, extending institutional accounts of voluntary certification and signaling theory. Because our outcomes capture financial‐reporting spillovers rather than the scheme's environmental ends, we cannot speak to whether certification changes environmental practice itself. For policymakers and investors, the findings caution against inferring improved financial‐reporting quality, or genuine environmental commitment, from certification status alone.

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Related topics: Corporate Social Responsibility Reporting · Auditing, Earnings Management, Governance · Corporate Governance and Financial Management