Culture and Corporate Decarbonization Efforts: A Time-Varying Analysis and Topology Approach

Abstract

This study examines the influence of culture on corporate responses to climate change. Given the inherent uncertainty associated with climate change, cultural values, as a non-market force, are expected to impact corporate’s decision making regarding decarbonization.To investigate this, a sample of large firms from 23 societies participating in the Carbon Disclosure Project (CDP) survey was analyzed, along with cultural measures assessed by the Global Leadership and Organizational Behavior Effectiveness (GLOBE) study. The findings of this study reveal that cultural values have diverse effects on corporate decarbonization efforts. Specifically, a preference for avoiding uncertainty and a future-oriented perspective tend to foster decarbonization, while a strong focus on performance appears to hinder such efforts. Additionally, the relationship between culture and decarbonization demonstrates a time-varying characteristic, indicating the influence of culture on carbon performance is contingent upon the evolution of carbon-related institutions over the study period.