CORPORATE GOVERNANCE AND HYDROGEN ACCOUNTING: A FRAMEWORK FOR EVALUATING TRANSITION DISCLOSURES IN HARD-TO-ABATE SECTORS

Abstract

This conceptual paper examines the role of corporate governance in strengthening the credibility of hydrogen accounting disclosures in hard-to-abate sectors. Against the background of Malaysia’s National Energy Transition Roadmap, Hydrogen Economy and Technology Roadmap, and the adoption of IFRS S1 and IFRS S2 through the National Sustainability Reporting Framework, the paper addresses the growing risk that firms may use clean-energy narratives symbolically rather than substantively. Drawing on Legitimacy Theory and Signalling Theory, the paper develops a Hydrogen Disclosure Trichotomy that classifies corporate reporting into symbolic, substantive, and fully integrated disclosures. Symbolic disclosures are characterised by broad sustainability language with limited quantification, while substantive disclosures include project-level evidence such as capital expenditure, partnerships, targets, timelines, emissions data, and operational metrics. Fully integrated disclosures represent the proposed highest level of reporting quality because they connect the hydrogen strategy with governance, risk management, financial planning, asset valuation, assurance, and enterprise value implications. The framework proposes that internal governance mechanisms act as filters that determine whether hydrogen disclosures remain impression management tools or become decision-useful financial communication. The paper contributes to green accounting and sustainability governance literature by offering testable propositions for future empirical research using annual reports, sustainability reports, and Bursa Malaysia filings. It concludes that emerging markets require not only ambitious energy policy and modern disclosure standards, but also strong board architecture to reduce greenwashing and promote credible, financially connected hydrogen transition reporting.