Abstract
AbstractIn response to pressures from governments, investors, non‐governmental organizations and other stakeholders, many large corporations have adopted a variety of carbon and energy management practices, taken action to reduce their emissions and set targets to reduce their greenhouse gas emissions. Using the case of international retailers, this article examines whether, and under what conditions, non‐state actors might be capable of assuming the governance roles that have historically been played by national governments.This article concludes that external governance pressures can, if they are aligned, robust and of sufficient duration, have a significant influence on internal governance processes and on corporate strategies and actions. However, the specific actions that are taken by companies – in particular those that require significant capital investments – are constrained by the ‘business case’. That is, companies will generally only invest capital in situations when there is a clear financial case (i.e. where the benefits outweigh the costs, when the rate of return meets or exceeds company targets) for action.That is, the extent to which external governance pressures can force companies to take action, in particular challenging or transformative actions that go beyond the boundaries of the business case, is not at all clear. This is particularly the case if the business case weakens, or if the opportunities for incremental change are exhausted. In that context, the power of non‐state actors to force them to consider radical changes in their business processes and their use of energy therefore seems to be very limited. Copyright © 2016 The Authors. Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd
Highlights
C ORPORATIONS MAKE A SUBSTANTIAL CONTRIBUTION TO GLOBAL GREENHOUSE GAS (GHG) EMISSIONS
This is seen on the targets being set, with US retailers continuing to set relatively short-term targets, emphasizing efficiency improvements rather than absolute emissions reductions (Sullivan and Gouldson, 2014). This emphasis is reflected in performance outcomes, with an analysis covering the period 2005–2012 indicating that the average greenhouse gas emissions from US retailers had increased by 0.05% per year; this compares with the UK supermarkets, whose average emissions had decreased by 2% per year (Sullivan and Gouldson, 2014)
The weaknesses in the external governance pressures are reflected in the relatively limited internal resources allocated by French retailers to climate change, in the emphasis on reducing building and transport-related greenhouse gas emissions and improving energy consumption, and in the lack of attention paid to supplier-related emissions and energy use
Summary
C ORPORATIONS MAKE A SUBSTANTIAL CONTRIBUTION TO GLOBAL GREENHOUSE GAS (GHG) EMISSIONS. The weaknesses in the external governance pressures are reflected in the relatively limited internal resources allocated by French retailers to climate change, in the emphasis on reducing building and transport-related greenhouse gas emissions and improving energy consumption, and in the lack of attention paid to supplier-related emissions and energy use. While these efforts have delivered benefits emissions have continued to rise. These investments are expected to achieve rates of return that are comparable to other business-related investments, i.e. between one and three years (Wesfarmers, 2012; Woolworths, 2012)
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