Determinants of Carbon Disclosure Quality: The Role of Corporate Governance and Managerial Discretion in Mexico

Abstract

This study examines how corporate governance characteristics, managerial discretion (MD), and firms’ network embeddedness (measured by board interlocks and centrality) affect the quality of carbon disclosure among firms listed on both the Mexican Stock Exchange (BMV) and the Institutional Stock Exchange (BIV) that are involved in the Carbon Disclosure Project (CDP). The research examines the internal and external dynamics of organizations and is grounded in agency and institutional theories. Using STATA 17, a dataset of 71 companies for the years 2016–2022 was created, and an ordinal logistic panel regression was used to evaluate the impact of corporate governance and MD on carbon disclosure. The primary conclusions imply that an environmental committee and board independence are useful for observing and enhancing sustainable reporting.