Green missing spots: Information entropy on greenhouse gas emission disclosure by Brazilian companies

Abstract

This study aims to address a critical gap in the literature by examining the incorporation of uncertainty in measuring carbon emissions using the greenhouse gas (GHG) Protocol methodology across all three scopes. By comprehensively considering the various dimensions of CO2 emissions within the context of organizational activities, our research contributes significantly to the existing body of knowledge. We address challenges such as data quality issues and a high prevalence of missing values by using information entropy, techniques for order preference by similarity to ideal solution (TOPSIS), and an artificial neural network (ANN) to analyze the contextual variables. Our findings, derived from the data sample of 56 companies across 18 sectors and 13 Brazilian states between 2017 and 2019, reveal that Scope 3 emissions exhibit the highest levels of information entropy. Additionally, we highlight the pivotal role of public policies in enhancing the availability of GHG emissions data, which, in turn, positively impacts policy-making practices. By demonstrating the potential for a virtuous cycle between improved information availability and enhanced policy outcomes, our research underscores the importance of addressing uncertainty in carbon emissions measurement for advancing effective climate change mitigation strategies.