Afro-Asian J. Finance and Accounting, Vol. 8, No. 2, 2018 123 Copyright © 2018 Inderscience Enterprises Ltd. Does voluntary greenhouse gas emissions disclosure reduce information asymmetry? Australian evidence Zahra Borghei*, Philomena Leung and James Guthrie Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia Email: zahra.borgheighomi@mq.edu.au Email: philomena.leung@mq.edu.au Email: james.guthrie@mq.edu.au *Corresponding author Abstract: Based on agency theory, this study investigates the consequences of carbon disclosure by non-greenhouse gas registered Australian companies on information asymmetry measures over a period after the introduction of the National Greenhouse and Energy Reporting Act 2007 and before the introduction of the Australian carbon tax. The level of carbon disclosure is scored through the content analysis of the annual reports. The findings support that carbon disclosure is negatively related to information asymmetry measures: the bid-ask spread and stock return volatility, in the year following disclosure. Overall, the research results are consistent with predictions of the agency theory and indicate that companies bear the extra voluntary reporting costs to achieve the perceived benefits of disclosure. The findings should be useful for corporate and stakeholders who are concerned about the value relevance of carbon disclosure in financial markets. For accounting standard setters, it highlights the urgency of carbon reporting guidelines. Keywords: carbon emission; voluntary disclosure; information asymmetry measures; NGER Act 2007; content analysis; climate change. Reference to this paper should be made as follows: Borghei, Z., Leung, P. and Guthrie, J. (2018) ‘Does voluntary greenhouse gas emissions disclosure reduce information asymmetry? Australian evidence’, Afro-Asian J. Finance and Accounting, Vol. 8, No. 2, pp.123–147. Biographical notes: Zahra Borghei is a Senior Research Assistant at the Department of Accounting and Corporate Governance, Macquarie University, Sydney Australia. She comes from a background as an Accounting Practitioner and has spent a considerable period employed in the financial and management accounting field in the private sector prior to embarking in an academic career. She completed her PhD in the Macquarie University and her research interests are in the area of environmental and financial accounting. Philomena Leung is an Associate Dean at the Faculty of Business and Economics in Macquarie University. She was appointed as the Head and Professor of Accounting and Finance and subsequently Accounting and Corporate Governance in January 2010. She has held various senior academic leadership roles at the Victoria University, RMIT University and Deakin