The use of real options valuation methodology in enhancing the understanding of the impact of climate change on companies

Climate change has in recent years gathered traction on the business, political and social agenda. From the business perspective, research has shown that climate change impacts on company value are uncertain, significant and strategically important. The challenge therefore is for the business community to apply financial valuation models that support the incorporation of the climate change impacts in strategic planning. However, the commonly used discounted cash flow techniques in capital budgeting are seen as failing to address the high levels of uncertainties inherent in climate change impacts. Real options thinking has been touted as having the potential to enhance understanding of these impacts via its direct handling of uncertainty, although not much research has been done to demonstrate this. Using an illustrative case study, this research presents an argument for introducing the real options approach, a new method for valuing options of future strategic action by companies in a setting that exhibits climate change impacts. The objective of this research is to contribute to the literature on strategic tools for addressing climate change and ultimately offer some management insights that can narrow the gap between finance theory and business practice. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Cities and Climate Change Challenges: Institutions,Policy Style and Adaptation Capacity in Bogotá

While a growing awareness of climate change has marked the institutional agenda at the national level in Colombia, the capital city of Bogotá has not undertaken actions to include adaptation to climate change within its policies so far. Conceptualizing the central role of city‐level institutions in the successful realization of adaptation policies is a straightforward matter. This is not the case for actions and conditions that may foster adaptation capacity according to varying institutional and social geographies. Using secondary data and a selection of interviews with key stakeholders occupying leading planning roles in important departments of the local administration, this article explores why and how a framework based on incentives and obstacles should be complemented by recent developments in the analysis of policy implementation based on the differentiation between political and programmatic success and failure on the basis of existing local policy styles.     

Towards an Agenda for Post‐carbon Cities: Lessons from Lilac,the UK's First Ecological,Affordable Cohousing Community

This article explores an agenda towards post‐carbon cities, extending and deepening established debates around low‐carbon, sustainable cities in the process. The label post‐carbon builds upon issues beyond those of greenhouse gas (GHG) emissions, energy conservation and climate change, adding a broader set of concerns, including economic justice, behaviour change, wellbeing, land ownership, the role of capital and the state, and community self‐management. The article draws upon a case study of an embryonic post‐carbon initiative completed in early 2013 called Lilac. Based in Leeds, Lilac stands for Low Impact Living Affordable Community and is the first attempt to build an affordable, ecological cohousing project in the UK. Its three aspects each respond to significant challenges: low‐impact living and the challenge of post‐carbon value change; affordability and the challenge of mutualism and equality; and community and the challenge of self‐governance. I conclude the article by exploring six lessons from Lilac that tentatively outline a roadmap towards post‐carbon cities: the need for holistic approaches that deal with complex challenges, prioritizing self‐determination rather than just participation, engaging with productive political tensions, adopting a process rather than an outcomes‐based approach, developing strategy for replicability, and finally, embracing a non‐parochial approach to localities.     

HRM at a Crossroads: Comments on “Evolution of Strategic HRM Through Two Founding Books: A 30th Anniversary Perspective on Development of the Field”

I agree with Bruce Kaufman's evaluation of the HRM field and the danger to its relevance if change does not take place in the field's almost exclusive use of normal science, lack of focus on organizational change and development and indifference to the development of useful and usable knowledge. I use the development of the Harvard Business School's first‐ever required course in HRM and Managing Human Assets, the book that grew from the course, to illustrate why and how the strategic HRM perspective of the book emerged. I go on to argue that we do not need more proof that HRM practices are associated with financial performance. The best CEOs already believe this, though they need knowledge and practices that will enable them to develop a positive sustainable HRM system. HRM research, both normal and action science, must answer the question of how a “great” HRM system—practices, leadership, organization design, culture, and change processes—might be developed over time (its takes years) and how great companies can avoid the liquidation of intangible assets in the face of pressures for short‐term performance. I describe my own work to illustrate the future direction HRM should take methodologically and conceptually. © 2015 Wiley Periodicals, Inc.     

The Effectiveness of Delhi's Fire Safety Regulation Amidst Poverty,Ignorance, Corruption and Non‐Compliance

This paper considers the effectiveness of fire safety regulation in Delhi, India. Ten theories are summarised that are used to explain why regulation does or does not work, or why fires might increase. Can imperfect markets generate institutions outside of the political process that produce reasonable results despite challenges of poverty, rising population density, social chaos, widespread corruption and non‐compliance with rules? In Delhi, city fire departments, albeit hampered by dysfunctional or non‐existent regulation, along with social and individual incentives provided by markets, have produced a relatively high level of safety.     

Urban Responses to Climate Change: Theories and Governance Practice in Cities of the Global South

Cities around the world have recently started to become ‘proactive’ initiators of climate strategies containing both mitigation and adaptation elements. The experience of these first movers has been studied and documented both empirically and, to a lesser extent, theoretically, primarily for cities in the global North. This symposium addresses related knowledge gaps by exploring case studies of urban regions in the global South confronting their projected climate change challenges, showcasing the experiences of Delhi, Santiago de Chile and Bogotá. Its specific aim is to explore the urban social response to nature change, the adaptation challenges faced by cities across the world and current practices of urban adaptation. Further, the symposium seeks to understand to what extent and in what respect current conceptual frameworks — which highlight urban ecological security and vulnerability — provide a useful context/framing to assist cities in confronting their challenges and to explain their actions. This introductory article examines current knowledge of the theory and practice of urban climate response. It introduces the concepts of ecological security and vulnerability and discusses the adaptive capacity of cities and how they are starting to respond to the emerging challenges of climate change. It concludes with a synthesis of the case articles and highlights some of the findings.     

Seeing Like a City‐State: Behavioural Planning and Governance in Egypt's First Affordable Gated Community

Haram City is Egypt's first ‘affordable’ gated community, hosting both aspirational middle‐class homeowners and resettled poor urban residents. Amidst legal ambiguity during Egypt's 2011–2013 revolutionary period, the management team of this public–private partnership was tasked with creating a ‘fully self‐sufficient’ city. While Haram City is the product of top‐down ‘seeing like a state’ master planning (Scott, 1998 ), the day‐to‐day resolution of class vulnerabilities and disputes over ‘reasonableness’ in city life requires forms of interpersonal adjudication otherwise addressed through local urban law—‘seeing like a city’ (Valverde, 2011 ). This article uses ethnography of management techniques aiming to ‘upgrade behaviour’ to theorize that a private entity, in a strategically indeterminate relationship with the state, reconciles future‐oriented planning and storied prejudices by merging two visions of governance. Imitating the repertoire of urban law, managers plan the very realm of bottom‐up decision making. They then adapt top‐down urban planning to bottom‐up dispute resolution to spatially consolidate the ‘consensual’ outcomes of a rigged game. Evoking both colonial Egyptian vagrancy laws and neoliberal paternalist welfare, ‘seeing like a city‐state’ governance amounts to authoritarianism that conceals itself within custom, appearing neutral so as to plan streets, codes and inner lives at once.     

Climate Change Adaptive Capacity in Santiago de Chile: Creating a Governance Regime for Sustainability Planning

For most urban areas, the challenges of adaptation are as urgent as those of mitigation. This is particularly the case where adaptive capacity is weak, particularly in low‐ and middle‐income countries, and the benefits of global mitigation in the short term will be experienced beyond 2050. A focus on adaptive capacity‐building in these vulnerable settings is imperative. Much of the emphasis in climate change since the early 1990s has been on basic science and how public policy should respond to it; less attention has been paid to the governance implications and connections with wider development processes. This article explores the governance challenges of adaptation in the Santiago Metropolitan Region. It points to weaknesses in the water and energy sectors, which have highly sectoral, horizontally unintegrated institutional structures and instruments that pose significant challenges for adaptation. Such cases point to the need to engage with both the wider planning concerns of existing development strategies and the basic elements of transdisciplinarity, finance and human capital‐building, in order to forge a more integrated adaptation response. Without an engagement with the governance issue and wider debates around metropolitan planning and socioeconomic development, it is unlikely the response will move beyond a limited physical infrastructure investment programme.     

在城市发展转型中重构——关于城市内涝防治问题的战略思考

近年来国内外许多城市均在雨季发生了不同程度的城市内涝问题,造成了人员财产损失,对城市品质和形象产生了较为负面的影响。从气候变化及城市化发展影响的视角,尤其是从城市市政工程和水系系统规划的角度,分析了城市内涝的主要成因;探讨了低冲击负荷影响开发、城市规划、城市市政工程专项和其他专业规划与城市内涝问题的关系;初步展望了城市内涝防治规划未来可能的发展方向与技术方法;提出应在下一阶段城市化进程中,利用城市发展转型与重构的契机,采取若干具有建设性的规划、工程和管理措施缓解城市内涝问题。     

试论稳定工作在开放式公园管理中的重要作用

城市公园是市民游乐、休闲、健身的重要场所,也是极易引发不稳定因素的敏感部位。特别是随着社会的进步,政府各项便民措施的出台,大部分城市公园都在陆续实行开放式管理。这一变化,无疑将给公园管理带来更大的难度。同时,也给稳定工作带来了新的课题,稳定工作在城市公园开放式管理中很关键。所以,只有将其切实纳入工作议程,加强组织领导,才能保证其落到实处,为城市公园开放式管理的有序顺畅、和谐自然提供可靠的保障。     

Small businesses and the environment: turning over a new leaf?

Previous studies on the environmental practices of small and medium‐sized enterprises (SMEs) in the UK and beyond have portrayed owner‐managers as laggards who underplay their firm's environmental impacts and resist environmental management due to its perceived cost. Yet a recent cross‐sector survey of 220 UK SMEs suggests that this intransigent stance may be slowly changing. Responses indicate a high percentage of owner‐managers actively involved in recycling, energy efficiency, responsible buying and selling, and efforts to reduce their carbon emissions. Owner‐managers saw it as their responsibility to help solve environmental problems and were reportedly willing to accept the costs of tougher environmental regulations and taxation. Business owners were motivated not just by the ‘push’ of legislation and environmental concern but by the ‘pull’ of potential cost savings, new customers, higher staff retention and good publicity for their firms. The survey also found that owner‐managers had resonance with the Stern Review's (2006) conclusions that the benefits of strong early action on climate change outweigh the costs, and that a transition to a low‐carbon economy will bring opportunities for business growth. This indicates that SMEs may be coming round to the idea that there is a business case for sustainability, although there is still some scepticism on the overall profitability of environmental action. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Business strategies and the transition to low‐carbon cities

Cities are key drivers of global climate change, with the majority of greenhouse gas (GHG) emissions being tied to urban life. Local actions to mitigate and adapt to climate change are essential for stabilization of the global climate and can also help to address other urban ecological problems such as pollution, decreasing biodiversity, etc. Companies are important urban actors in the development of low‐carbon cities because they provide a multitude of goods and services to city populations and directly influence urban carbon dioxide (CO₂) emissions. This is a new area of research. While studies on corporate sustainability are numerous, there is little, if any, existing research that examines the role of companies in climate change adaptation and mitigation within specific urban areas. Urban ecologists also have not examined how corporate activity affects urban systems. Taking a multi‐disciplinary systems approach, we present a conceptual model of the role of companies in managing urban interactions with the climate system. We also present empirical findings illustrating how one company ‘partners’ with the city of Rotterdam to test electric vehicles as a pilot project for urban climate adaptation and mitigation. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

‘Post‐Third‐World City' or Neoliberal ‘City of Exception'? Rio de Janeiro in the Olympic Era

This article considers processes of urban development within the context of mega‐event preparations in Rio de Janeiro. We begin with a brief overview of these development processes, highlighting their connections to political and economic change in recent years. Proponents of these mega‐event‐led initiatives argue that Rio is undergoing a period of inclusive growth and integration: a perspective we call here a ‘post‐Third‐World city' narrative of urban renewal. Critics, however, contend that urban officials are harnessing mega‐events (e.g. the 2014 World Cup and the 2016 Olympic Games) to push forward a neoliberal agenda of socially unjust policies benefiting the interests of capital and marginalizing the city's poor and especially its favelas (i.e. the ‘city‐of‐exception' thesis). In this article we explore the insights of these two perspectives and consider why they have grown popular in recent years. Though we side generally with the city‐of‐exception thesis, we argue that important geographic and historical particularities must also be accounted for. Without carefully situating analytical perspectives empirically—in particular, cases in which theoretical models are drawn from European and North American contexts—urban researchers risk concealing more than they reveal in analyses of rapidly developing countries like Brazil.     

Low carbon procurement: An emerging agenda

The importance of climate change is shaping public policy internationally at several levels with much of the effort aimed at reducing the amount of carbon emissions released to the atmosphere through anthropogenic activity. Public procurement is a key financial mechanism available to governments to drive policy change and because of its scale can be also one of the most effective. During the past decade Low Carbon Procurement (LCP) has emerged as focal policy agenda in the UK and other countries. However, the implementation of LCP requires improved definition by governments and a greater understanding of Carbon Management tools and concepts such as Lifecycle Analysis on the part of procurement chiefs. Focusing on public procurement in the UK within the context of international policy development, this paper develops a working definition and model for LCP to guide future discussions on policy and practice. The paper presents an agenda of expected challenges for the implementation of LCP, including problems associated with weighing trade-offs between carbon and wider environmental or sustainability objectives, use of carbon tools and methodologies. The paper concludes by identifying key directions for further LCP research.     

INTER‐CITY BUS SERVICES IN CANADA – TIME FOR DEREGULATION

The regulatory framework for inter‐city bus operators in Canada is facing multiple challenges with regard to productivity, consumer satisfaction and cost controls. In spite of government reports calling for deregulation, there has been little action by provincial governments to deregulate entry and pricing. As a result, Canadians are paying higher fares and service quality is lower than in the more deregulated markets of the United Kingdom and the United States.     

‘There are Really Two Cities Here’: Fragmented Urban Citizenship In Tel Aviv

The inflow of African migrants into Tel Aviv's southern neighborhoods has aroused much resentment from long‐term residents. Contesting the uneven burden sharing, which exacerbates already poor conditions at the local level, southern residents have aimed their grievances at municipal and national policymakers as well as the city's more affluent northern residents. In analyzing the contestation, this article challenges traditional conceptions of migrants as the binary opposition to residents of the host city, intruders on the shared and socio‐culturally homogenous urban arena. We build on recent theorizations of urban citizenship as an agency‐centered process to think through the ways in which city residents articulate their identities relationally and hierarchically against new and old ‘others’ and argue that international newcomers have destabilized long‐conceived social relations. Using narratives of long‐term southern residents, we illustrate how the uneven geographies of African migrants' settlement in Tel Aviv have (re)set in motion a process of urban citizenship formation by southern residents, thereby adding new layers of contention to what was already a highly stratified realm.     

China's Emergent City‐Region Governance: A New Form of State Spatial Selectivity through State‐orchestrated Rescaling

This article examines the emergence of city‐region governance as a specific state spatial selectivity in post‐reform China. The process has been driven by the state in response to the crisis of economic decentralization, and to vicious inter‐city competition and uncoordinated development. As part of the recentralization of state power, the development of urban clusters (chengshiqun) as interconnected city‐regions is now a salient feature of ‘new urbanization' policy. I argue in this article that the Chinese city‐region corresponds to specific logics of scale production. Economic globalization has led to the development of local economies and further created the need to foster ‘regional competitiveness'. To cope with regulatory deficit at the regional level, three mechanisms have been orchestrated by the state: administrative annexation, spatial plan preparation and regional institution building, which reflect recent upscaling in post‐reform governance.     

Reassembling Lesseps Square,Rethinking Barcelona: A More‐than‐Human Approach

This article discusses the great paradox of the planning of public spaces in Barcelona. While for years the city's residents, politicians and experts have been steeped in democratizing, participatory discourses, the interminable controversies almost all the council's initiatives in the streets and squares of Barcelona have aroused are evidence of a clear short‐circuit. Somehow this participatory‐democratic consensus has run up against a collective discord which, in my view, indicates the incapacity of the current channels and mechanisms of citizen participation to truly give shape to a more democratic city, one which does not block dissent or stand in the way of the possible. I discuss this short‐circuit through a case study, the Lesseps Square controversy, including a methodological and epistemological debate which, in order to study how the square was reassembled in practice after the participatory remodeling process, puts forward an actor‐network‐theory‐inspired approach to the study of public space. I argue that Barcelona, a city whose public institutions are deeply committed to creating channels for residents to participate in public processes, is at the same time enacting a closure of its public spaces. My contention here is that the urban environment is already distributed (in Rancière's sense) before it is given over to participation, and that this prevents the emergence of a (more‐than‐human) demos that could redistribute public space by taking account of innumerable unrepresented parties.     

适应型城市:将适应气候变化与气候风险管理纳入城市规划

气候变化对城市规划提出新的要求,即:通过人口、土地等资源的时空配置,最大限度地减小城市面临的潜在气候风险。本文从"城市发展如何考虑气候变化与风险管理需求"这一核心问题出发,探讨了气候风险、气候风险管理及适应型城市的概念和内容,指出在中国城市化提升阶段,城市发展迫切需要加强气候风险管理的意识和能力。基于国外城市应对气候变化风险的实践与经验,提出将适应与气候风险管理纳入城市规划,提出构建适应型城市的几个要点。     

Corporate Carbon and Financial Performance: The Role of Emission Reductions

This article uses econometric techniques to examine the effect of corporate carbon performance on corporate financial performance. I extend the existing literature in this research field by differentiating between two measurement perspectives: carbon performance expressed as annually reported carbon dioxide (CO₂) emission equivalents and improvements in carbon performance over time. Thereby, the article re‐addresses the research question ‘when and how does it pay to be green?’ in the context of carbon emissions and climate change mitigation. Using a nonlinear modeling technique, the findings indicate that it pays to be green for companies with superior carbon performance but not for companies with inferior carbon performance. The results also show that carbon emission mitigation is linearly and significantly positive related to return on sales (ROS) but negatively related to Tobin's q . These contradictory findings help us to understand why – in spite of growing regulatory pressure – companies have been slow to respond with effective action to tackle climate change beyond marginal efficiency improvements that correspond to ‘low‐hanging fruits’. The empirical analysis is based on an unbalanced sample of 7625 firm‐year observations covering carbon emission data (Scope 1 and Scope 2) for 1640 international firms from 2003 to 2015. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment