Corporate Carbon Performance Research Articles

Climate risk and corporate environmental performance: Empirical evidence from China

This study creatively investigates the impact of extreme national climate risk on corporate environmental performance in the context of China. An innovative approach based on an assessment of the economic input-output life cycle is utilized to evaluate carbon footprint at the corporate level. We select the Chinese climate risk score calculated by Germanwatch to represent climate risk, and then test its effects on corporate carbon performance using the dynamic threshold model. The results indicate that an increase in national climate risk will promote corporate carbon emissions, which are more pronounced when the climate risk score is in the high-risk range. Furthermore, the effects of climate risk on corporate carbon performance differ across companies with different geographical locations and environmental restrictions. In addition, ownership and whether a company is listed on stock exchanges do not significantly affect the impact of climate risk on corporate carbon performance in China. Our findings reflect the subtle connections between Chinese companies and climate risk on the whole, and could help relevant business leaders, policymakers, and investors enhance related policies.

National culture and corporate carbon performance

This study investigates the effects of cultural, institutional and natural ecosystems on corporate response to climate change. We find that national cultural tendencies towards future orientation, uncertainty avoidance, gender egalitarianism and humane orientation strengthen corporate performance, whereas certain other cultural dimensions, such as in-group collectivism, pose barriers to optimal carbon performance. We suggest that culture provides an incremental explanation for corporate climate behaviours beyond socioeconomic or regulatory determinants. Our study contributes to the carbon literature by comprehensively examining the role of a country’s national culture in determining corporate carbon performance, and its findings may help in the implementation of international climate accords (such as the Paris Agreement of 2015) in countries with heterogeneous cultural values and natural environmental contexts. JEL Classification: G54, Q56, P48

Crude oil price uncertainty and corporate carbon emissions.

Low-carbon transformation has become a key priority in China, as demonstrated in the implementation of the Carbon Peak, Carbon Neutralization policy, leading to increasing concern of environmental performance at the corporate level. This paper measures the carbon emission of 1,089 Chinese companies through the EIO-LCA-based approach. Then we examine the impacts of international crude oil price fluctuations and the corporate development level on carbon emissions of individual companies. Our results indicate that an increase in international crude oil price uncertainty could inhibit the company’s carbon emission. In parallel, we find that there might exist an environmental Kuznets curve (EKC) inverted U-shaped correlation between the company’s development level and its environmental performance. However, some exceptions to corporate carbon performance may emerge, resulting from specific corporate characteristics such as the state-owned nature and whether the firm is listed on the stock exchange. Our results could help companies optimize their internal carbon emission structure during the low-carbon transition process and contribute to effective policy regulations towards the target of carbon reduction.

Carbonwashing: A New Type of Carbon Data-Related ESG Greenwashing

Despite the increased attention and capital incentives around corporate sustainability, the development of sustainability reporting standards and monitoring systems has been progressing at a slow pace. As a result, companies have misaligned incentives to deliberately or selectively communicate information not matched with actual environmental impacts or make largely unsubstantiated promises around future ambitions. These incidents are broadly called “greenwashing,” but there is no clear consensus on its definition and taxonomy. We pay particular attention to the threat of greenwashing concerning carbon emission reductions by coining a new term, “carbonwashing.” Since carbon mitigation is the universal goal, the corporate carbon performance data supply chain is relatively more advanced than that of the entire sustainability data landscape. Nonetheless, the threat of carbonwashing persists, even far more severe than general greenwashing due to the financial values attached to corporate carbon performance. This paper contextualizes sustainable finance-related carbonwashing via an outline of the communication as well as the measurement, reporting, and verification (MRV) of carbon emission mitigation performance. Moreover, it proposes several actionable policy recommendations on how industry stakeholders and government regulators can reduce carbonwashing risks.

The impact of the consistency of carbon performance and carbon information disclosure on enterprise value

This study applies representative and quantifiable indicators to measure carbon performance and uses crawler technology to determine whether carbon information is disclosed in 2009-2017 manufacturing CSR reports to study the measure of the consistency of carbon performance and carbon information disclosure on enterprise value. The results show that the consistency of corporate carbon performance and carbon information disclosure has a more significant positive impact on corporate value and that this promotional effect is more obvious among non-state-owned enterprises and companies with high levels of corporate governance.

Reconfiguring IVHF-TOPSIS decision making method with parameterized reference solutions and a novel distance for corporate carbon performance evaluation

The hesitant and imprecise uncertainties widely exist in real decision-making problems. For solving the class of problems, this work is aimed at reconfiguring a novel method under the TOPSIS framework to solve the general uncertain decision problem that with both the ratings of alternatives and weights of criteria represented by interval-valued hesitant fuzzy (IVHF) information. Three novelties are proposed to support the reconfigured method. First, a parameterized approach for generating apt positive and negative IVHF reference solutions is proposed, which permits decision makers (DMs) to express their different aspiration strengths for fitting complex and uncertain decision scenarios and situations. Second, a novel distance for IVHF elements is constructed based on the modification of Wave-Hedges measurement to address the defects of the previous hesitant distances and to measure the separations of alternatives in TOPSIS. Third, a nine-step solution procedure of IVHF-TOSPSIS method is reconfigured to solve effectively the general problem that the ratings and weights are expressed with IVHF information. Finally, the reconfigured method is exploited to settle the carbon performance evaluation of industrial firms and some sensitivity and comparison analyses are conducted to validate the proposed method.

Corporate Carbon and Financial Performance: The Role of Emission Reductions

AbstractThis article uses econometric techniques to examine the effect of corporate carbon performance on corporate financial performance. I extend the existing literature in this research field by differentiating between two measurement perspectives: carbon performance expressed as annually reported carbon dioxide (CO2) emission equivalents and improvements in carbon performance over time. Thereby, the article re‐addresses the research question ‘when and how does it pay to be green?’ in the context of carbon emissions and climate change mitigation. Using a nonlinear modeling technique, the findings indicate that it pays to be green for companies with superior carbon performance but not for companies with inferior carbon performance. The results also show that carbon emission mitigation is linearly and significantly positive related to return on sales (ROS) but negatively related to Tobin's q. These contradictory findings help us to understand why – in spite of growing regulatory pressure – companies have been slow to respond with effective action to tackle climate change beyond marginal efficiency improvements that correspond to ‘low‐hanging fruits’. The empirical analysis is based on an unbalanced sample of 7625 firm‐year observations covering carbon emission data (Scope 1 and Scope 2) for 1640 international firms from 2003 to 2015. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

Corporate Carbon and Financial Performance: An Empirical Analysis

We hypothesize that corporate carbon performance is negatively associated with accounting-based financial performance and that this relationship is positive for market-based financial performance. We use an international dataset of 26,813 firm-year observations from 2005-2014. Surprisingly, we find a negative linkage for both types of financial performance. We find support for our results in several robustness checks and when comparing US and European firms. Only for firms regulated by the EU Emission Trading System, we cannot find such a negative linkage. We conclude that there is clear need for policy interventions in order to pave the way for a low-carbon economy.

Corporate Carbon and Financial Performance: A Meta‐analysis

SummaryWe use meta‐analytical techniques to address the question“When does it pay to be green?” Existing meta‐studies in this research field cover a range of ecological issues and synthesize a variety of environmental performance measurements. This precludes a detailed examination of how differences in measurement approaches account for variations in empirical results. In order to conduct such an examination, we focus on only one ecological issue, climate change, and one particular operational performance dimension: corporate carbon performance as expressed by a firm's level of carbon dioxide (CO2) emission equivalents. Our sample comprises 68 estimations from 32 empirical studies, covering a total of 101,775 observations. In addition to our examination of the causal relationship, we analyze whether differences in operationalizations of carbon performance and financial performance predetermine empirical outcomes. The meta‐analytic findings indicate that carbon emissions vary inversely with financial performance, indicating that good carbon performance is generally positively related to superior financial performance. The results show that relative emissions are more likely to produce statistically significant results than absolute emissions. Furthermore, market‐based measures of financial performance are more positively related to carbon performance than accounting‐based measures. We conclude that measurement characteristics, which were not analyzed in detail by previous meta‐studies, may present a great source of cross‐study variability.

Are Corporate Carbon Management Practices Reducing Corporate Carbon Emissions?

ABSTRACTThis paper is the first large scale, quantitative study of the impact of corporate carbon management practices on corporate greenhouse gas (GHG) emissions. Using data for 2009 and 2010 from the Carbon Disclosure Project survey, we find little compelling evidence that commonly adopted management practices are reducing emissions. This finding is unexpected and we propose three possible explanations for it. First, it may be because corporate carbon data and management practice information have not been reported in a standardized way. Second, there may be a delay between the application of corporate carbon management practices and their impact on emissions performance. Third, carbon management practices are not sufficiently impact‐oriented, meaning there is no relationship to observe. Our findings are important for policymakers designing corporate GHG reporting standards, for the multiple stakeholders trying to understand the drivers of corporate carbon performance, and for the corporate managers responsible for measuring, reporting and mitigating emissions. Copyright © 2015 The Authors. Corporate Social Responsibility and Environmental Management published by ERP Environment and John Wiley & Sons Ltd.

The carbon performance of the 100 largest US electricity producers

Efforts towards decarbonizing the energy system have to focus on individual actors within the system. Their current and potential future stake in energy consumption and contribution to climate change has to be analyzed when formulating energy policies targeting system-wide reduction efforts. Focusing on firms, this paper develops a framework for the assessment of corporate carbon performance. We use this framework for an empirical assessment of the 100 largest US electricity producers within three different carbon scenarios. Our results show that in a scenario without changes in the US institutional environment electricity producers will not face a severe increase of their carbon exposure and only a small improvement regarding the carbon intensity of the electricity mix is achieved. In a scenario with more carbon-constrained US energy market conditions some companies face a financial risk from using and emitting carbon that more than triples compared to today. However, in a scenario with strong investments in renewable energy technologies the carbon dependency of electricity production can be significantly reduced. We discuss these findings from a climate policy and financial markets perspective.

Which Emissions Do We Need to Account for in Corporate Carbon Performance? Response to Murray and Colleagues

Journal of Industrial EcologyVolume 15, Issue 1 p. 160-163 Letter to the Editor Which Emissions Do We Need to Account for in Corporate Carbon Performance? Response to Murray and Colleagues Timo Busch, Timo Busch Swiss Federal Institute of TechnologyGroup for Sustainability and TechnologyZurich, SwitzerlandSearch for more papers by this author Timo Busch, Timo Busch Swiss Federal Institute of TechnologyGroup for Sustainability and TechnologyZurich, SwitzerlandSearch for more papers by this author First published: 18 January 2011 https://doi.org/10.1111/j.1530-9290.2010.00321.xCitations: 14Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Citing Literature Volume15, Issue1February 2011Pages 160-163 Translations 《产业生态学报》中文摘要 (JIE Chinese Abstracts) Resúmenes en Español de la Revista de Ecología Industrial (JIE Spanish Abstracts) RelatedInformation

Corporate Carbon Performance Indicators Revisited

Corporate Carbon Performance Indicators Revisited

Corporate Carbon Performance Indicators

SummaryThe dependency on carbon‐based materials and energy sources and the emission of greenhouse gases have been recognized as major problems of the 21st century. Companies are central to the effort to grapple with these issues due to the large material flows they process and their capabilities for technological innovation. It is important, on the one hand, to determine the individual stake companies have in these issues and, on the other, to measure companies' performance. Since the results of studies thus far have been ambiguous, we define four comprehensive and systematic corporate carbon performance indicators: (1) Carbon intensity is physically oriented and represents a company's carbon use in relation to a business metric. (2) Carbon dependency illustrates the change in physical carbon performance within a given time period. (3) Carbon exposure reveals the financial implications of using and emitting carbon. (4) Carbon risk estimates the change in financial implications of carbon usage within a given time period. On the basis of these general definitions, we specify the indicators for a standardized application that can support two important stakeholders in their decision making: policy makers, who can include such information when evaluating current climate policies and formulating future ones, and investors and financial institutions, which can compare companies with respect to their carbon performance and corresponding financial effects.