Moral or Pragmatic Legitimacy? Examining Firm Actions to Reduce Carbon Emissions

Abstract

We examine the conditions under which firms are likely to enact carbon emission reduction projects. To this end, we build upon and advance the stakeholder and issue salience framework by extending it to moral and pragmatic legitimacy of carbon emission reduction claims. To test the importance of moral and pragmatic legitimacy of these claims, we build a unique dataset of 1172 firm-year-panel observations and find that pragmatic legitimacy of claims has a higher and significant relationship to firm actions in reducing carbon emissions.