Impact of Carbon Emissions Disclosure on Firm Value: An Empirical Study of Iraqi Oil Companies According to IFRS S2

Abstract

Iraqi oil companies are among the most important economic institutions in the country, representing the main source of public revenue and reflecting Iraq's vital role in global energy markets through production and export operations. Given the rapid developments in sustainability and environmental disclosure standards, the need has arisen to study the impact of implementing the International Financial Reporting Standard on Sustainability (IFRS S2), which pertains to disclosing climate change risks, particularly carbon emissions, on the value of oil companies.
This research aims to analyse the level of IFRS S2 implementation in Iraqi oil companies and measure the impact of carbon emissions disclosure on enhancing the value of these companies from the perspective of investors and stakeholders. To achieve this objective, a sample of managers and executives from ten oil companies was selected for the period from 2019 to 2024. The study adopted a comprehensive analytical approach, including descriptive statistics, correlation analysis, simple and multiple regression, and analysis of variance (ANOVA), in addition to testing the validity and reliability of the responses of 60 participants, all of whom were managers and decision-makers. Trend analysis was also used to examine the evolution of environmental disclosure policies over the years. The results showed that disclosing carbon emissions is significantly and effectively linked to the value of oil companies, contributing to increased transparency and higher investor valuations. The study also revealed that an effective regulatory framework for managing emissions and monitoring their environmental impact plays a crucial role in explaining the relationship between environmental disclosure and company value. The research concluded that implementing IFRS S2 not only improves the quality of financial reporting but also enhances investor and stakeholder confidence, supporting companies' ability to meet global sustainability requirements.
The study affirms that Iraqi oil companies' commitment to environmental disclosure according to IFRS S2 standards represents a strategic step towards improving their market value, strengthening their competitiveness, and achieving long-term business sustainability.