Abstract
Electric utilities are in an environmental sensitive industry, exploiting natural resources and contributing to climate change issues. The focus of critical stakeholders on sustainability agendas and management approaches and the increasing tight sector-regulations pressure electric utilities to act and distribute sustainability reports declaring their sustainability performances and goals towards achieving climate targets. However, literature criticizes the utility’s reporting practices as form of impression management being decoupled from actual sustainability compliance. This paper analyzes in light of institutional theory the compliance with or decoupling from sustainability agendas in the under-researched electricity sector by identifying the coverage of materiality in sustainability reports and the implemented sustainability management control systems for sustainability development. Quantitative and qualitative methods are used including correlation- and variance analysis of material indicators and expert interviews. This study contributes by having identified a sector-wide continuous form of selective coupling from the sustainability agendas in electric utilities. Furthermore, this paper found that sustainability agendas and the implementation of sustainability control mechanisms are governed by institutional hybrid logics which are still at an early stage.
Highlights
Exploitation of resources and growing environmental strain increased stakeholder pressure for companies to address and disclose economic and environmental and social sustainability issues [1, 2, 3, 4] They need to find solutions to comply with the ambitious climate targets following the 2015 Paris Agreement and the United Nation Sustainability Development Goals [5, 6]
The worldwide Coverage Rate (CR) in Sustainability Reports (SR) in the seven subcategories and the three dimensions of sustainability are: general standard disclosures almost 75%; all other categories cover less than 50% except labor practice and decent work
Results of influencing dependency factors of SR in relation to ownership show that 74 Electric Utility Companies (EUC) worldwide are privately owned showing 56.5% of CR on average, while 112 public EUC worldwide cover only 49.8% with a significance of p = 0.022
Summary
The implementation of SMCS for SD is governed by Institutional Logics (IL) which lead managerial behavior and attitudes for sustainability agendas towards compliance or else [31] show implications for decoupling [34, 51, 27, 30]. Coercive isomorphism is driven by regulators and stakeholder demands; mimetic forces are seen, when EUC imitate behavior of other legitimized and successful EUC; normative forces are driven by standard-setters, universities that provide norms for organizational behavior [33, 9] These isomorphic forces bring either forth strategic responses of total compliance, forms of decoupling or else complete avoidance [34, 27].
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