G7 firms often favor symbolic over substantive climate reporting, but bigger, more profitable firms with women on the board — and firms in countries with stronger regulatory quality — issue more credible TCFD-aligned disclosures; the paper’s hand-coded labels also create a valuable gold-standard dataset for automating credibility detection.

Measuring Climate Disclosure Credibility: Symbolic Versus Substantive Reporting Under TCFD in G7 Economies

Santi Gopal Maji, Rituraj Boruah · September 12, 2026 · Corporate Social Responsibility and Environmental Management

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Across G7 firms (2019–2023), many climate disclosures are symbolic rather than substantive, and higher disclosure credibility is systematically associated with larger size, greater profitability, female board representation, lower GHG intensity, and stronger national regulatory quality, with results robust to dynamic panel GMM.

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ABSTRACT This study examines the credibility of climate‐related corporate disclosures by distinguishing between symbolic and substantive reporting practices. Drawing on institutional and signaling theories, we argue that firms facing common climate‐reporting expectations may differ in the substantive informational content through which they conform to those expectations. To operationalize disclosure credibility, we develop a Task Force on Climate‐related Financial Disclosures (TCFD)‐aligned measure that classifies disclosed information as symbolic or substantive for each TCFD recommendation, based on its specificity, quantification, firm‐specific content, and, where relevant, forward‐looking information. Using hand‐collected data from sustainability and annual reports of firms operating in G7 economies over 2019–2023, we construct a firm‐level measure capturing firms' reliance on symbolic relative to substantive disclosure. The associations between firm‐ and country‐level factors and disclosure credibility are examined using random‐effects GLS and two‐step system GMM estimation. The findings reveal substantial heterogeneity in climate disclosure credibility across G7 firms. Firm size and profitability are negatively associated with symbolic climate disclosure, while a critical mass of women directors is associated with higher disclosure credibility. In contrast, greater greenhouse gas emission intensity is associated with higher symbolic disclosure. At the country level, stronger regulatory quality is associated with higher disclosure credibility, whereas cultural individualism shows no robust association once endogeneity is addressed. Interaction analyses further indicate that the association between TCFD adoption and disclosure credibility varies with regulatory quality, whereas the association with board gender diversity varies with the rule of law. Overall, the findings show that firms' reliance on symbolic versus substantive climate reporting is systematically associated with firm characteristics, governance mechanisms, and the institutional environments in which firms operate.

Summary

Main Finding

Firms’ climate disclosures vary substantially in credibility across G7 countries: many firms rely on symbolic (low-substantive) reporting rather than detailed, firm-specific, quantified, and forward-looking disclosures aligned with TCFD recommendations. Disclosure credibility is systematically associated with firm size, profitability, governance (female board representation), firms’ emission intensity, and country institutional quality; these associations persist after addressing endogeneity.

Key Points

Disclosure credibility is operationalized TCFD-aligned by classifying each disclosed item as symbolic or substantive based on: specificity, quantification, firm-specific content, and (where relevant) forward-looking information.
Hand-collected sustainability and annual reports from firms operating in G7 economies (2019–2023) are used to build a firm-level measure capturing reliance on symbolic vs substantive climate disclosure.
Estimation methods: random-effects GLS and two-step system GMM to address potential endogeneity.
Main empirical associations:
- Larger and more profitable firms tend to rely less on symbolic disclosure (higher credibility).
- Presence of a critical mass of women directors is associated with higher disclosure credibility.
- Higher greenhouse gas (GHG) emission intensity is associated with more symbolic disclosure (lower credibility).
- Stronger national regulatory quality is associated with higher disclosure credibility.
- Cultural individualism is not robustly associated once endogeneity is addressed.
Interaction effects:
- The positive link between TCFD adoption and disclosure credibility depends on regulatory quality.
- The positive link between board gender diversity and credibility depends on the rule of law.
Overall conclusion: reliance on symbolic vs substantive climate reporting is not random but systematically related to firm characteristics, governance, and institutional environment.

Data & Methods

Data: Hand-collected disclosures from sustainability and annual reports of firms operating in G7 countries for 2019–2023; disclosures coded at the level of TCFD recommendations into symbolic vs substantive items (using explicit criteria: specificity, quantification, firm-specific content, forward-looking elements).
Outcome: Firm-level measure of reliance on symbolic relative to substantive disclosure (TCFD-aligned credibility score).
Econometric approach:
- Random-effects GLS for pooled panel associations.
- Two-step system GMM for dynamic panel estimation and to address endogeneity concerns.
- Interaction analyses to test moderation by country institutional variables (regulatory quality, rule of law) on the effects of TCFD adoption and board gender diversity.

Implications for AI Economics

Labeled, TCFD-aligned dataset as a gold standard: The hand-coded symbolic vs substantive labels provide high-quality supervised training data for NLP/ML models to automate measurement of disclosure credibility at scale.
Feature guidance for predictive models: include firm-level variables (size, profitability, GHG intensity, board gender composition), country institutional variables (regulatory quality, rule of law), and interaction terms — these are empirically important predictors of symbolic reporting.
Model design and evaluation:
- Use multimodal models combining textual features (semantic specificity, forward-looking language, quantified statements) with numeric disclosures and governance/institutional covariates.
- Validate models against the paper’s hand-coded labels and test robustness to endogeneity (e.g., use panel methods, temporal holdouts, or causal ML/IV approaches).
Monitoring and policy tools:
- AI systems trained on this labeling scheme can flag likely symbolic (low-credibility) disclosures for regulators, investors, and auditors, improving detection of greenwashing.
- Incorporate institutional context into automated risk scores — threshold behaviors differ by country regulatory quality and rule of law.
Research directions for AI-economics:
- Scale the coding approach beyond G7 to test generalizability across emerging markets and regulatory regimes.
- Use causal ML methods to better isolate drivers of symbolic reporting and evaluate policy interventions (e.g., mandatory disclosure rules).
- Combine automated credibility scoring with firm event studies to quantify market consequences of symbolic vs substantive disclosures.

Assessment

Paper Typequasi_experimental Evidence Strengthmedium — High-quality, hand-coded outcome measure and multi-year panel improve internal validity, and use of system GMM addresses some endogeneity concerns; however, causal claims rest on GMM assumptions (validity of lag instruments, absence of time-varying omitted confounders), potential selection into disclosure, and subjective coding decisions, so causality is plausible but not definitive. Methods Rigormedium — Rigorous data collection (manual coding against explicit criteria), use of panel estimators and system GMM, and exploration of interactions strengthen inference; remaining concerns include possible coding measurement error, sample selection (firms that disclose), instrument validity for GMM, limited details on robustness checks/alternative identification (e.g., external instruments or natural experiments), and potential unobserved time-varying confounders. SampleHand-collected sustainability and annual reports from firms operating in G7 countries over 2019–2023, coded at the level of TCFD recommendations into symbolic vs substantive items and aggregated into a firm-level credibility (symbolic/substantive) score; panel of firms (exact N and sector composition not reported in the supplied text). Themesgovernance adoption IdentificationHand-coded firm-level TCFD-aligned disclosure credibility score from sustainability/annual reports (2019–2023) used in panel regressions; baseline associations estimated with random-effects GLS and dynamic panel two-step system GMM (using lagged variables as instruments) to address endogeneity; interaction terms with country institutional variables to test moderation. GeneralizabilityLimited to G7 countries and 2019–2023 — may not generalize to emerging markets or earlier/later regulatory environments, Only firms that produce disclosures are observed; firms that do not disclose are excluded (selection bias), Hand-coding criteria may introduce subjective measurement error; cross-coder reliability not reported, Sectoral composition may bias results if certain industries dominate the sample, System GMM assumptions may not hold in other contexts, limiting causal generalization

Claims (10)

Claim	Direction	Outcome	Confidence & Evidence	Details
Firms in G7 countries vary substantially in the credibility of their climate disclosures, with many relying on symbolic rather than detailed, firm-specific, quantified, and forward-looking reporting aligned with TCFD recommendations. Governance And Regulation	negative	Reliance on symbolic versus substantive climate disclosure	Reading fidelity high Study strength medium	not reported 0.48
Larger firms tend to rely less on symbolic climate disclosure and therefore have higher disclosure credibility. Governance And Regulation	positive	TCFD-aligned climate disclosure credibility	Reading fidelity high Study strength medium	not reported 0.48
More profitable firms tend to rely less on symbolic climate disclosure and therefore have higher disclosure credibility. Governance And Regulation	positive	TCFD-aligned climate disclosure credibility	Reading fidelity high Study strength medium	not reported 0.48
A critical mass of women directors is associated with higher climate disclosure credibility. Governance And Regulation	positive	TCFD-aligned climate disclosure credibility	Reading fidelity high Study strength medium	not reported 0.48
Firms with higher GHG emission intensity tend to provide more symbolic and less credible climate disclosure. Governance And Regulation	negative	TCFD-aligned climate disclosure credibility	Reading fidelity high Study strength medium	not reported 0.48
Stronger national regulatory quality is associated with higher climate disclosure credibility. Governance And Regulation	positive	TCFD-aligned climate disclosure credibility	Reading fidelity high Study strength medium	not reported 0.48
The association between TCFD adoption and disclosure credibility is stronger in countries with higher regulatory quality. Governance And Regulation	positive	TCFD-aligned climate disclosure credibility	Reading fidelity high Study strength medium	not reported 0.48
The association between board gender diversity and disclosure credibility is stronger where the rule of law is stronger. Governance And Regulation	positive	TCFD-aligned climate disclosure credibility	Reading fidelity high Study strength medium	not reported 0.48
Cultural individualism is not robustly associated with climate disclosure credibility after addressing endogeneity. Governance And Regulation	null_result	TCFD-aligned climate disclosure credibility	Reading fidelity high Study strength medium	not reported 0.48
Reliance on symbolic versus substantive climate reporting is systematically related to firm characteristics, governance, and the institutional environment rather than being random. Governance And Regulation	mixed	Firm-level reliance on symbolic versus substantive climate disclosure	Reading fidelity high Study strength medium	not reported 0.48