The interaction between institutional and stakeholder pressures: Advancing a framework for categorising carbon disclosure strategies

Ki‐Hoon Lee,Ben Farr‐Wharton,David M Herold,Wolfram Groschopf

doi:10.1002/bsd2.44

Abstract

AbstractMultiple institutional and stakeholder demands have led to different strategies in the measurement and disclosure of carbon‐related information. Although scholars acknowledge the prevalence of competing institutional logics as being a driver of different outcomes, existing research offers conflicting views on their implications, thus lacking clarity. In response, this paper proposes two frameworks (a) to clarify the institutional and stakeholder influences on carbon disclosure and (b) to depict four different types of carbon disclosure strategies to assess a company's “true” carbon position. We identify various concepts of institutional fields, organisations, and stakeholders that influence disclosure and combine the two critical concepts of logic centrality and stakeholder salience to categorise the multiple institutional and stakeholder pressures on carbon disclosure. Whereas the first framework proposes that institutional theory and stakeholder theory both provide, on different levels, a theoretical foundation to examine the influences on carbon disclosure, the second model categorises carbon disclosure outcomes in terms of logic centrality and stakeholder salience. Both frameworks advance the understanding of the interaction between firm‐level agency and field‐level pressures and synthesise the current literature to offer conceptual clarity regarding the varied implications and outcomes linked to carbon disclosure practices and strategies.

Highlights

Climate change is a major environmental issue of concern for the global community and is increasingly recognised by corporate managers as one of the most important business challenges in the 21st century (Haque & Deegan, 2010)
We provide important insight into how stakeholder influences and institutional logics interact in order to influence carbon disclosure strategies, and we further develop research on competing logics by exploring how organisations are impacted by both firm‐level agency and field‐level pressures
If institutional and stakeholder pressures affect carbon disclosure strategies in companies, frameworks that describes these influences and eventually categorise the strategies based on these influences expand insight into the concepts and implications and advance organisational research

Summary

Introduction

Climate change is a major environmental issue of concern for the global community and is increasingly recognised by corporate managers as one of the most important business challenges in the 21st century (Haque & Deegan, 2010). Evidence shows that multinational companies are facing pressures from multiple stakeholders to disclose information about their carbon‐related activities (de Villiers & Alexander, 2014; Hahn, Reimsbach, & Schiemann, 2015; Kolk, Levy, & Pinkse, 2008). In response to this pressure, companies have increasingly implemented carbon management practices (Borghei, Leung, & Guthrie, 2016; Herold & Lee, 2017a; KPMG, 2014; Welbeck, 2017); the carbon management practices and the associated disclosure strategies vary extensively between companies (Herold, 2018a; Hrasky, 2011; Kolk et al, 2008). Institutional logics provide the organising principles for an organisational field that shape cognition and behaviour in an industry (Besharov & Smith, 2014)

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Conclusion