Corporate intentions to participate in emission trading

The adoption of the Kyoto Protocol in 1997 has led to increasing business interest in the issue of climate change. It has also created much uncertainty for companies, particularly about the role of trading in realizing emission reductions. This paper investigates what drives multinational corporations to show interest in emission trading and carbon offset projects to deal with climate change. On the basis of an analysis of data of 136 companies derived from a questionnaire, it also examines the role that country of origin, industry affiliation and companies' environmental strategy play in this regard. Findings show that industry pressure and product and process innovations are the main determinants for multinational corporations to participate in the emission market. It appears that climate policy particularly induces energy‐related industries to reduce emissions, which puts them ahead of other industries with regard to their interest in emission trading. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Stakeholder engagement and environmental strategy – the case of climate change

Many management studies analyze stakeholder pressures and corresponding corporate strategies in the context of the natural environment. This study investigates the role of the sources of stakeholder pressures and additional contextual factors for choosing an environmental strategy. By focusing on climate change as an important ecological challenge, four general response strategies to greenhouse gas (GHG) reduction pressures are empirically derived and discussed. The analysis is based on a global survey that includes 141 companies across eight different GHG emission‐intensive industries. It is found that organizations' response strategies do not relate to individual stakeholder groups, but rather the organization's level of pollution measured as its GHG intensity is identified to have an influence on the environmental strategy. We discuss important implications for stakeholder theory as well as policy makers and suggest areas for future research. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

Stakeholder pressures and corporate climate change mitigation strategies

Climate change mitigation and its related reduction of greenhouse gas (GHG) emissions is one of the most important challenges facing society. The major cause of the problem and the key to its solution are GHG‐intensive firms that emit vast amounts of anthropogenic GHG emissions. The study reported herein aims to increase our understanding of the climate change mitigation strategies of these firms, in particular their antecedents and effects. A comprehensive conceptual model is proposed and tested empirically based on a survey of 247 firms that participated in the European Union's Emissions Trading Scheme in the first two trading periods. We find that market pressures for reducing GHG emissions, perceived GHG‐related regulatory uncertainty and environmental strategy focus are important determinants of corporate GHG reduction strategies which, in turn, enhance GHG‐related performance. We also show that the results vary depending on the type of emissions.     

Mitigating climate change – how do corporate strategies differ?

Many companies are facing increasing pressure by governments, shareholders and other stakeholders to reduce their CO₂ emissions in order to mitigate climate change. The importance of managing CO₂ emissions and crafting adequate CO₂ strategies has increased for those companies affected. We present a framework that conceptualizes a company's CO₂ strategy as the focus on one or a combination of several strategic objectives: CO₂ compensation, CO₂ reduction and carbon independence. In order to investigate the CO₂ strategies of a worldwide sample of 91 electricity producers we perform a content analysis of their answers to the Carbon Disclosure Project (CDP). We demonstrate the measures the companies take to manage their emissions, the CO₂ strategies they adopt and antecedents that influence these strategies. We find that half of the companies take parallel emission management measures that aim at all three strategic objectives, while the other half pursue selected objectives only. We also find that companies with different CO₂ strategies significantly differ in terms of regional affiliation, company size and absolute amount of CO₂ emissions, while we could not identify a significant difference in relative CO₂ emissions. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Corporate Carbon Strategies in Responding to Climate Change

With climate change emerging as one of the most important issues affecting the business circle, companies have begun considering the carbon issue in their overall strategic positioning. However, few studies have examined the corporate carbon strategies in developing and advanced developing countries, where climate change regulation is extensive and market uncertainty is relatively high. In addition, there has been growing interest among researchers and practitioners concerning the relationship between the carbon strategy and firm performance. This paper presents a framework for identifying the corporate carbon strategy. The cluster analysis of 241 Korean companies indicates six types of corporate carbon strategy: ‘wait‐and‐see observer’, ‘cautious reducer’, ‘product enhancer’, ‘all‐round enhancer’, ‘emergent explorer’ and ‘all‐round explorer’. This study empirically examines whether there are differences between these carbon strategy types in terms of the sector, firm size and firm performance. The results indicate a significant relationship between a firm's carbon strategy and its sector and size but a significant relationship between the carbon strategy and firm performance is not confirmed. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Board Effectiveness and the Voluntary Disclosure of Climate Change Information

This paper examines the relationship between board of directors' effectiveness and voluntary climate change disclosures. Since risk management and reporting fall under the board's responsibility, we relate board effectiveness to the firm's decision to voluntarily respond to the Carbon Disclosure Project (CDP) annual questionnaire as well as the quality of disclosures about climate‐change‐related risks and strategies to mitigate them. Our results show a positive association between board effectiveness and the firm's decision to answer the CDP questionnaire as well as its carbon disclosure quality. The paper contributes to the ongoing debate on the determinants of voluntary climate change disclosures. Our findings highlight the importance of the board of directors' role in enhancing the transparency and relevance of voluntary disclosures of climate change business impacts. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Marketing strategies in the age of sustainable development: Evidence from the food industry

In this paper we investigate characteristics and drivers of sustainability marketing strategies. Based on an empirical study in the food industry, we identify four sustainability marketing strategy types with distinctive characteristics (performers, followers, indecisives and passives). Consumers are one of the main drivers of sustainability marketing strategies. Depending on the sensitization of consumers to socio‐ecological problems, the perceptibility of socio‐ecological qualities, the individually perceived net benefits and the availability of sustainable alternatives, we argue that the typology and drivers apply to non‐food industries as well. Furthermore, we find that the incorporation of social and ecological aspects into marketing strategies also depends on the market segment in which the company competes: companies that are positioned in the premium or quality segment are more inclined to take an active stance on sustainability marketing than companies that compete in the price segment. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

A Neo‐Gramscian Approach to Corporate Political Strategy: Conflict and Accommodation in the Climate Change Negotiations*

ABSTRACT A neo‐Gramscian theoretical framework for corporate political strategy is developed drawing from Gramsci's analysis of the relations among capital, social forces, and the state, and from more contemporary theories. Gramsci's political theory recognizes the centrality of organizations and strategy, directs attention to the organizational, economic, and ideological pillars of power, while illuminating the processes of coalition building, conflict, and accommodation that drive social change. This approach addresses the structure‐agency relationship and endogenous dynamics in a way that could enrich institutional theory. The framework suggests a strategic concept of power, which provides space for contestation by subordinate groups in complex dynamic social systems. We apply the framework to analyse the international negotiations to control emissions of greenhouse gases, focusing on the responses of firms in the US and European oil and automobile industries. The neo‐Gramscian framework explains some specific features of corporate responses to challenges to their hegemonic position and points to the importance of political struggles within civil society. The analysis suggests that the conventional demarcation between market and non‐market strategies is untenable, given the embeddedness of markets in contested social and political structures and the political character of strategies directed toward defending and enhancing markets, technologies, corporate autonomy and legitimacy.     

A critical assessment of how non‐governmental organizations use the capital markets to achieve their aims: a UK study

Non‐governmental organizations (NGOs) increasingly attempt to use the capital markets to further their aims. This paper proposes a taxonomy for such intervention that is based on two distinct strategies: a macro capital redistribution strategy and a micro investor influence strategy, both of which can be undertaken either directly or indirectly. The paper reviews empirical evidence of the success of each strategy through four case studies. It concludes by suggesting that there is some empirical evidence that the typology can be successfully applied and that there is some initial evidence that NGO capital market engagement strategies have, in certain circumstances, successfully changed business strategy. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment.     

How warm is the corporate response to climate change? Evidence from Pakistan and the UK

In response to growing consensus among scientists and governments to act fast to avoid dangerous impacts of climate change, many industries have started to prepare for a carbon‐constrained world. However, this response is far from being uniform. Often action is predicated on economic, technological, organizational and institutional drivers and barriers, which vary between countries and across industrial sectors. In order to understand the effectiveness of industry response, it is therefore important to analyse corporate response across different sectors in different countries. Focusing on the nine most energy‐intensive and greenhouse gas (GHG) emitting industrial sectors, this paper compares corporate responses to climate change in Pakistan and the UK. By analysing the divergence of strategies adopted by industries across different sectors in two countries, the paper examines the key factors influencing corporate adoption and implementation of GHG reduction and energy‐efficiency strategies in Pakistan and the UK. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Do Board's Corporate Social Responsibility Strategy and Orientation Influence Environmental Sustainability Disclosure? UK Evidence

The environmental implications of corporate economic activities have led to growing demands for firms and their boards to adopt sustainable strategies and to disseminate more useful information about their activities and impacts on environment. This paper investigates the impact of board's corporate social responsibility (CSR) strategy and orientation on the quantity and quality of environmental sustainability disclosure in UK listed firms. We find that effective board CSR strategy and CSR‐oriented directors have a positive and significant impact on the quality of environmental sustainability disclosure, but not on the quantity. Our findings also suggest that the existence of a CSR committee and issuance of a stand‐alone CSR report are positively and significantly related to environmental sustainability disclosure. When we distinguish between firms with high and low environmental risk, we find that the board CSR/sustainability practices that affect the quantity (quality) of environmental sustainability disclosure appear to be driven more by highly (lowly) environmentally sensitive firms. These results suggest that the board CSR/sustainability practices play an important role in ensuring a firm's legitimacy and accountability towards stakeholders. Our findings shed new light on this under‐researched area and could be of interest to companies, policy‐makers and other stakeholders. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Business strategy and firm efforts on environmental protection: Evidence from China

Although business strategy plays a fundamental role in firm operations, whether and how business strategy affects firms' environmental protection behaviors remain unclear. On the basis of a typical emerging market, we show that firms following prospector strategies take more environmental protection actions than do those following defender strategies. Our findings are robust to endogeneity checks and alternative measures of business strategy. We further find that prospectors engage in more environmental activities than do defenders when the degree of financial constraint or earning management is high. Our results are particularly pronounced in state‐owned enterprises, heavy‐polluting industries, and firms located in regions with strict environmental regulations. Overall, this study provides clear policy implications for regulators concerned with environmental protection.     

Analysing emission intensive firms as regulatory stakeholders: a role for adaptable business strategy

Climate change regulations pose significant challenges to firms that produce large volumes of carbon emissions. Accordingly, firms in the trade‐exposed emission intensive industries are critical regulatory stakeholders. Following the Australian Government's ratification of the Kyoto Protocol in 2007, the proposed installation of an emission trading scheme is one of several business concerns as the government seeks to implement climate change policies and regulations. In this study, we inve stigate some of the major concerns that confront emission intensive businesses, and ask what the critical issues are for firms as a consequence of climate change policy implementation and what this means for their strategies. The study uses a concept mapping and analysis technique to reveal that future emission trading systems and business performance impacts resulting from emission reduction initiatives represent serious strategic concerns to stakeholder firms. Adaptable business strategies offer a potential solution to these perceived concerns and problems. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.     

Environmental Strategy and Competitive Advantage: The Role of Small‐ and Medium‐Sized enterprises' Dynamic Capabilities

Drawing on the resource‐based theory and institutional theory, we develop a framework to explain the processes by which the environmental strategy of small‐ and medium‐sized enterprises (SMEs) contributes to their competitive advantage. We test our assumption using data collected from 214 UK‐based SMEs in the technology sector. We find that the effects of environmental strategy can lead to development of their marketing competence, as well as research and development (R&D) competence, which ultimately contributes to superior financial performance. We also find that a reciprocal causal relationship exists between SMEs' marketing and R&D competences. Combined, we reveal the presence of a serial multiple mediation relationship between SMEs' environmental strategy and financial performance through marketing competence and then R&D competence, or vice versa. Our study offers important academic and managerial implications, and also points out future research directions. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Green consumer behaviour: an experimental analysis of willingness to pay for remanufactured products

Products' end‐of‐life management has recently become a critical business issue. One of the possible end‐of‐life strategies is remanufacturing, which can provide competitive advantages through material and energy savings. Beyond industrial organization challenges, there is a question about the interest of developing a green marketing strategy for remanufactured products. Indeed, remanufactured products can be considered as green products since their industrial process has environmental benefits. Our paper asks whether consumers are willing to pay for remanufactured products, especially when they are informed that these products are ‘green’. We use experimental auctions to elicit consumers' WTP for specific characteristics of remanufactured products. Our study indicates that consumers tend to value the remanufactured product less than the conventional one unless they are informed about their respective environmental impacts. We find no evidence that consumers are willing to pay a premium for the green (i.e. remanufactured) product. However, providing environmental information to consumers has an effect on their WTP for the conventional product: they generally decrease significantly their WTP for the conventional (and thus most polluting) product. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

Adaptation Measures of Energy and Utility Companies to Cope with Water Scarcity Induced by Climate Change

Resource‐intensive business plays a fundamental role in causing climate change through the emission of large amounts of GHGs (greenhouse gases), and, in turn, climate‐induced physical changes affect companies. The IPCC (Intergovernmental Panel on Climate Change) reports an increase in the frequency and severity of extreme weather and climate events (IPCC, 2012). Droughts represent a major challenge for energy and water businesses, in terms of both exacerbation of dry climates and increase in the number of territories that experience water shortage. On the basis of an analysis of the energy and utility companies operating in different continents, the objective of this empirical research is twofold: on the one hand, it examines how these companies perceive the changes in water availability induced by climate change (as well as the potential impacts on business); on the other hand, it analyses the corresponding measures that these companies adopt to cope with changes in hydrology and water resources driven by climate change. Data from the Carbon Disclosure Project (CDP) provide valuable information about business climate‐related responses of several of the world's largest firms. Our results show that, in the energy and water sectors, some adaptive measures are starting to be implemented to deal not only with the risks but also with the opportunities related to climate‐induced physical changes, thus leading to interesting innovation. The paper concludes that anticipated positive effects could drive energy and utility companies towards a proactive stance to achieve a competitive advantage and trigger innovative trajectories. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Corporate Carbon Strategies and Greenhouse Gas Emission Assessments: The Implications of Scope 3 Emission Factor Selection

Scholars and practitioners acknowledge the benefits of organizations understanding their contribution to global warming and implementing carbon management strategies to address climate change concerns. A key element of a carbon management strategy is to reduce emissions, which requires an assessment of a firm's greenhouse gas emissions. For most organizations the indirect (scope 3) emissions represent the largest portion of their total carbon footprint. When facility‐specific data are not available, firms are encouraged to use standard emission factors to calculate scope 3 emissions. This paper investigates how sampled Australian organizations assess their scope 3 emissions with respect to the emission factors they are using to convert activity data into units of carbon dioxide equivalent emission (CO₂‐e), and the implications for producing an accurate emission assessment. The research study found that, where conversion information was not available in a recognized government publication, the use of varying conversion value sources resulted in wide discrepancies in reported emissions for like activities. This undermines the assessment quality, makes comparison of results across organizations difficult and can lead to inappropriate carbon management strategy choices and misallocation of resources. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment     

The Red Queen and the environment: reconciling public regulation and business strategy

Until the late 1980s, environmental regulation in Denmark was often carried out in an intensely politicized and confrontational climate marked by strong tensions between authorities and polluting firms. In recent years, however, the general spirit of regulation seems to have improved significantly. During this same period, ‘generic’ measures such as general discharge limits have been supplemented with more specific demands, tailored for individual companies. The present paper presents a case study based on the environmental regulation of TripleNine, a West Jutland fishmeal factory. In response to major changes in its market and regulatory environment, the firm has revised its general strategy and taken a more pro‐active stance on environmental issues, pursuing a policy of active co‐operation with local environmental authorities. Informed by this and other case studies, a theoretical model is developed to account for the incorporation of ecological concerns into firms' general business strategy. Against the background of this model, the paper addresses the long‐term possibilities of reconciling business strategy and public regulation in the future. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

Sustaining Competitive Advantage Through Corporate Environmental Performance

This research investigates the relationship between a firm's environmental efforts and the sustainability of its competitive advantage by analyzing the effects of change in firm environmental performance on the persistence of profitability growth. We find that environmental resources allow a firm with superior financial performance to sustain its competitive advantage, and also complement the efforts of a poorly performing firm to hasten recovery from inferior financial performance. Our findings further indicate that firms attain such positive effects through enhanced profit margins resulting from improved environmental performance. Additionally, we observe that a corporate strategy of improving environmental performance demonstrates management's responsibility to maximize the shareholder wealth of a well‐performing firm. The results provide valuable insights to align environmental activities towards developing unique resources for sustaining the competitive advantage. The study provides an empirical support for creating economic value by benefiting the environment. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

How does investors' heterogeneous trust affect the complexity of financial products? A look into the development of online finance

We introduce “trusting effects” to market complexity strategy and, through modeling, measure the decision‐making behavior of financial institutions' complexity choices as online and offline finance develops into different stages. We find that the complexity of financial products is not only determined by the intrinsic value and structure of products but also largely influenced by the behavior of investors. In addition, the characteristics of financial institutions, as well as different investor structures, also affect the complexity of the products and the equilibrium. Therefore, financial institutions attempt to exploit investors' biases and cognitive limitations through complexity strategies and ultimately obtain excess returns.