Corporate Climate Research Articles

How government procurement shapes corporate climate disclosures, commitments, and actions

Abstract This study examines how government procurement impacts firms’ environmental disclosures and whether they have tangible effects. Using a triple-difference research design that exploits the exogenous increase in federal funding allocations to counties based on population census revisions, we find that firms with high exposure to government contracts significantly increase climate disclosure following expanded procurement opportunities. We also document that enhanced disclosure is characterized by a positive tone that emphasizes firms’ green investment and commitment to climate adaptation. The effect is more pronounced in counties with a greater increase in procurement volume and when firms have lower ex ante sustainability performance. Finally, we find firms that increase climate disclosure are more likely to earn government contracts, and they undertake real actions by reducing toxic emissions and enhancing the development of green products. Overall our results suggest government procurement promotes corporate climate responsibility by incentivizing firms to undertake climate mitigation actions.

Show & Tell: An Analysis of Corporate Climate Messaging and Its Financial Impacts

As climate-induced physical and transition risks to corporations are becoming more and more material, investors are increasingly scrutinizing a patchwork of voluntary climate-related public communications, namely emission disclosures, emission reduction commitments, and soft information from earnings calls and other corporate announcements. We observe, for large-cap US firms, a rise in the usage of all forms of climate communication from 2010 to 2020. Public communication is commonly used by firms in emission-intensive sectors, such as industrials, materials, and utilities. We provide evidence that increased transparency from disclosure, especially of scope 1 and scope 2 emissions, can offset a significant portion of the P/E discount associated with carbon emissions, especially for firms in the energy and industrial sectors. A similar offsetting effect is observed for positive climate-related sentiment during earnings calls Q&A, but not for the management update section of earnings calls. In contrast, decarbonization commitments have a subsequent statistically insignificant impact on valuation.

Protecting the climate through EU supply chain legislation? Two critiques and a compromise

Abstract Climate change law faces a serious implementation problem. New instruments promoted by states from the Global North to address the implementation gap come from the sphere of trade and supply chain regulation. This article focuses on corporate climate due diligence legislation and its potential contribution to fulfilling the objectives outlined in the Paris Agreement. By examining the EU’s legislative process towards adopting a Corporate Sustainability Due Diligence Directive (CSDDD), it explores various approaches to regulating the climate impacts of corporations, including along global supply chains. The article critiques both the ultimately adopted climate transition planning requirement and the European Parliament’s alternative proposal, which aimed to incorporate climate mitigation into the general due diligence framework of the Directive but was unsuccessful. It applies two overarching critiques, termed ‘not enough’ and ‘regulatory imperialism’, to the specific context of corporate climate due diligence. Although these critiques may initially appear contradictory, the article endeavours to reconcile them through a compromise approach that fosters greater participation, integrates measures to mitigate impacts on self-determination, and specifies the obligations imposed on corporations regarding climate mitigation. Finally, the article discusses the idea of a decentralised enforcement regime and highlights the importance of regulation in states of the Global South to achieve a truly planetary legal order on corporate climate accountability.

Climate change disclosure and carbon performance of Chinese listed companies: exploring the moderating effects of climate governance and corporate environmental governance

Climate change poses numerous risks to businesses, leading to growing attention from governments and stakeholders toward corporate climate change disclosures. However, whether these disclosures can effectively drive companies to enhance their carbon reduction efforts remains an urgent question. Using panel data from heavily polluting companies in China, this study employs generalized structural equation modeling (GSEM) to empirically examine the moderating effects of government-level climate governance and corporate-level environmental governance on the relationship between climate change disclosure and carbon performance. The results indicate that the interaction between climate governance and climate change disclosure significantly promotes improvements in carbon performance, whereas the impact of corporate environmental governance is comparatively limited. These findings underscore the critical role of government-driven climate governance in enhancing the effectiveness of climate change disclosures and provide practical recommendations for policymakers and corporations to improve climate disclosure practices and advance carbon reduction efforts.

Climate Justice Perspectives and Experiences of Nurses and Their Community Partners.

The global climate crisis is an immediate threat, causing inequitable health impacts across different populations. Climate justice connects the causes and effects of climate change to structural injustices in society. Nurses and community-based organizations (CBOs) partner in promoting justice and health equity. The purpose of this article is to describe how nurses and their CBO partners envision, perceive, and experience climate justice in the communities they serve. Participants were recruited via a screening survey sent to nursing and public health organizations in the United States. This descriptive mixed-methods study utilized participatory photo mapping (i.e., combined participatory photography, community mapping, and interviews) to capture participants' understanding and experiences of climate justice. Recruitment methods identified eight partnerships across six states. Participants depicted how climate injustice is reinforced by colonial severance from Nature. Participants noted that state violence and corporate climate pollution degraded the public's health. Climate justice was described as a long struggle to regain spiritual relationships within Nature, fostering belonging, abundance, and protected communities of care. Planetary health and well-being were central to participants' experiences with climate justice. Future research could explore barriers and facilitators to addressing climate injustice and promoting climate justice in diverse settings.

Corporate Climate Strategies and Financing the Transition to a Low-Carbon Economy in Japan

Corporate Climate Strategies and Financing the Transition to a Low-Carbon Economy in Japan

Impact of corporate climate change disclosure on firm performance: empirical evidence from an emerging economy

PurposeThis study aims to investigate the impact of corporate climate change disclosure (CCD) on the financial performance of Indian firms.Design/methodology/approachThe study is grounded in the principles of signalling theory, legitimacy theory and the cost-benefit analysis approach. The sample for the study includes 77 Indian firms from 2018–2019 to 2021–2022. Required data are collected from published annual reports, sustainability reports and the Ace Equity Database. The explanatory variable CCD is measured using content analysis based on the Task Force on Climate-related Financial Disclosures (TCFD) framework. The panel fixed-effects or random-effects models have been considered for hypotheses testing.FindingsThe disclosure level of CCD and its different components is found to be moderate with an average score of 0.364 among top Indian firms. Regression results reveal a significant positive association between CCD on firms’ market-based performance, suggesting its long-term benefits. Besides, additional analysis indicates the differential impact of CCD on financial performance based on firms’ CEO duality status, industry affiliation and pre-COVID and post-COVID period, thus establishing their moderating role in the observed relationship.Practical implicationsThe study highlights the necessity of enhancing climate-related disclosure by Indian firms and strategically leveraging the same to boost their financial performance.Originality/valueFew studies have examined the implications of CCD (based on the TCFD framework) on firm performance. Moreover, exploring the moderating role of CEO duality, industry type and COVID-19 in the CCD and firm performance relationship is a novel empirical contribution.

Assessing corporate climate action: Corporate climate policies and company-level emission reductions

Private investment decisions are expected to play a decisive role in redirecting capital flows in line with the Paris Agreement. The financial sector and policymakers have emphasized the role of corporate climate action and climate-related disclosure, including backward-looking emissions figures and forward-looking information on corporate climate policies to enable investors to reallocate capital to firms with promising emission reduction pathways. However, there is at best inconclusive evidence on the relationship between corporate climate policies and subsequent company-level emission reductions. Previous research was limited by small sample sizes and short observation periods, impeding the analysis of time-lagged effects or the inclusion of company-level fixed effects. To overcome these shortcomings, we draw on a new dataset with 17,198 observations from 1,749 companies that disclosed their corporate climate policies between 2010 and 2022. While our results show only a weak link between individual policies and company-level emissions, we find some evidence for an improved climate performance for absolute emissions for companies that introduced a comprehensive corporate climate policy mix. This is in line with public policy research that has found comprehensiveness to be an important dimension for public policy mixes and emphasizes the role of a mix of corporate climate policies rather than relying on individual measures.

The impact of renewable energy auctions on global grid greening: A comparative analysis across economies

Renewable energy (RE) auctions have emerged as an essential strategy for countries who want to diversify their energy mix due to the climate change challenges. While earlier research predominantly establishes the fact that bidding positively influences RE capacity, they mostly fail to capture the mixed success that depends on the economic and corporate environment. This study aims to complement it by assessing the effects of RE auctions on the uptake of renewable energy in countries characterized by fluctuations in economic conditions or different business climates. This paper analyzes the factors in bid efficacy with a dataset of 98 countries from 2000 to 2020 through cluster analysis of the corporate climate quality index and DID analysis of sequential policy endogenously. The paper also shows that RE auctions are, on average, a successful policy instrument in growing the share of renewable energy capacity. However, their effectiveness strongly correlates with the context of the country. For countries with stable corporate environments, the average treatment effect is stronger, while for those experiencing financial or structural unpredictability, the issue of RE auctions should be better twiddled. These close results emphasize the need for the elaboration of specific policies concerning auctions that would take into consideration the features of a particular country's economy and legislation. Therefore, to sum it up, RE auctions are a possible instrument for augmenting the worldwide RE generation capacity. However, their potential is not enormous, and the effects are not equitable among all countries. The government should use outcome data to understand the conditions necessary for the long-term success of RE auctions.

Climate change on the board: navigating directors’ duties

ABSTRACT A noteworthy trend within the surge in corporate climate litigation is the increasing focus on personal responsibility of corporate directors. In 2023, ClientEarth commenced a derivative claim against Shell and its directors in the English courts, arguing that those directors were in breach of their directors' duties under the Companies Act 2006. This article analyses the claimant's arguments, examines the basis upon which the court dismissed the claim and identifies the procedural challenges that are likely to be faced by future claimants in commencing similar claims. In light of the rising trend in shareholder activism, coupled with the ever-increasing regulatory requirements to strengthen corporate human rights and environmental performance, the article anticipates further attempts to bring derivative claims against directors for failing to take action to address climate change risks. It provides suggestions for the sorts of arguments that may have greater prospects of succeeding before the English courts.

Cultivating inclusive leadership: a catalyst for enhanced organizational citizenship

Purpose The present manuscript aims to develop and validate a theoretical model capable of explaining that organizational citizenship behavior is influenced by the extent to which employees feel valued, accepted and considered integral to the organizational fabric. To do this, the authors draw on social identity theory, according to which the level of identification of a person with a group or organization is not fixed but situational and context-dependent. Design/methodology/approach To validate the theoretical model, the authors surveyed the employees of eight large-scale distribution companies operating in Italy. Overall, the authors received completed data from 2,010 employees. Findings The authors theorize and demonstrate that the presence of an inclusive corporate climate positively influences employees’ perceptions of work inclusion and that this latter, in turn, positively affects organizational citizenship behavior. Furthermore, they show that the indirect effect of an inclusive corporate climate on organizational citizenship behavior becomes stronger when inclusive leadership is promoted within an organization. Originality/value Overall, this paper confirms social identity theory in a novel way. Social identity theory suggests that the context can impact an employee’s identification with the organization they work for, without specifying the characteristics that the context must possess. The authors’ contribution reaffirms this theory by proposing that it is specifically the inclusiveness of the context that positively influences the employee’s identification within the organization. By focusing on this aspect of inclusion, this research introduces a novel perspective that enriches the current discourse on OCB and underscores the importance of cultivating inclusive workplace environments. Also, the authors add theoretical nuance to previous literature by suggesting that the way top management exercises leadership over employees can amplify the strength of corporate climate influence on worker inclusion perception.

Innovating for sustainability in food and beverage companies: the role of governance and environmental factors in climate change mitigation

PurposeFocusing on the food and beverage (F&B) sectors, this study aims to identify combinations of external environmental factors (natural disasters and water stress) and internal corporate governance factors (corporate social responsibility [CSR] sustainability committee, board gender diversity and stakeholder engagement) that lead to the integration of climate change mitigation innovation and technologies.Design/methodology/approachA fuzzy set qualitative comparative analysis (fsQCA) was conducted on a global sample of 262 listed companies in the F&B sectors. Two additional analyses were performed for European and Asian companies.FindingsIn the three models, the presence of CSR sustainability committees and stakeholder engagement was crucial for achieving the integration of climate change mitigation innovation and technologies. The relevance of board gender diversity differs between the European and Asian models, highlighting potential regional influences on corporate climate innovation decisions. The combination of external and internal factors is the key to justifying different approaches to achieving climate innovation.Originality/valueThis study offers insights into the factors driving the integration of climate change mitigation innovation and technologies into company strategies. Related strategies must combine external and internal factors to enhance the climate resilience and competitiveness of F&B companies while reducing their environmental impact.

Climate risk perception and corporate ESG performance: evidence from China

PurposeThis study examines the impact of climate risk perception on corporate environmental, social and governance (ESG) performance from a microfirm perspective.Design/methodology/approachUsing a sample of Chinese listed companies from 2009 to 2021, we constructed corporate climate risk perception indicators based on the Management Discussion and Analysis (MD&A) in the annual reports of the companies, and analyzed it using ordinary least squares regression.FindingsThe results show that climate risk perception improves corporate ESG performance by encouraging green innovation. Heterogeneity analysis suggests that the greater the magnitude of climate risk shocks to the firms, the stronger the risk coping ability and the weaker the environmental regulation, the more pronounced the improvement of climate risk perception on corporate ESG performance. Furthermore, economic consequence analysis shows that the enhancement effect of climate risk perception on corporate ESG performance contributes to increasing corporate value.Originality/valueThis study emphasizes the significance of corporate climate risk perception in enhancing ESG performance. It provides a theoretical basis for enterprises to respond to climate risk and sustainable development.

Economic costs of poor PSC manifest in sickness absence and voluntary turnover

Abstract Work-related stress is a major occupational health and safety (OHS) issue that has industrial relations origins. Aside from the moral and human rights imperatives to improve the corporate climate for worker psychological health (as per psychosocial safety climate, PSC), there are strong economic costs for not doing so. PSC refers to worker perceptions of the corporate safety system to protect and promote workers’ psychological health and wellbeing. It is a leading indicator of working conditions, which in turn affect workers’ health and work engagement. In this study, we estimate the attributable economic cost of low PSC due to sickness absence and turnover. Data were collected from a multinational company using survey at Time 1 (T1) and objective company data (i.e., sickness absence and turnover) after one year (T2). Using regression analysis and a matched sample of 617 responses, PSC was negatively related to future sickness absence. A binomial logistic regression with 1268 respondents (i.e., all responses at T1) showed that PSC was negatively related to future voluntary turnover. An economic analysis suggests that improving OHS via PSC could save an organisation with 5000 employees USD 0.6–2.7 million per year. Building PSC to protect and promote workers’ psychological health is a likely economic saving on organisational productivity.

Environmental protection tax reform and corporate Climate Risk Disclosure

The reform of the environmental protection tax (EPT), a crucial policy instrument for combating climate change, significantly influences corporate climate risk. Hence, a thorough examination of the connection between EPT and corporate climate risk disclosure (CRD) is essential for companies to better evaluate the risks and challenges they encounter. The findings of the research indicate: (1) EPT reform substantially boosts corporate CRD. (2) Mechanism tests demonstrate that EPT enhances corporate CRD via three pathways: increasing public environmental awareness, fostering green innovation, and improving total factor productivity. (3) Heterogeneity analysis shows that various factors such as micro-level corporate characteristics (ownership and corporate life cycle), industry features (high-tech industries and factor intensity), and macro-level aspects (urban location, size, and resource attributes) differentially affect the impact of EPT. (4) Additional analysis from the perspective of institutional investors indicates that a higher proportion of institutional investor holdings amplifies the positive effect of EPT on corporate CRD. These research conclusions aid in accurately assessing the CRD impact of EPT and provide empirical support for policy development and modification.

Driving the Future: Transition Finance under the EU Framework

The EU sustainable finance framework identifies four key elements for transition finance: taxonomy, credible transition plans, science-based targets, and climate benchmarks. This article delves into each element to help financial market participants better understand and leverage European Union (EU) tools, enhancing their transition finance strategies and supporting companies in developing credible transition plans. It concludes that taxonomy, CapEx investments and plans, GHG emission reduction targets, and annual absolute emissions reductions are crucial for validating credible transition plans, with a strong emphasis on phasing out fossil fuels and ensuring robust corporate climate governance.

An Empirical Analysis of Factors Influencing Employee Well-Being and Their Impact on Job Performance: A Study of Bank Employees in Jaipur

This study investigates the impact of human resource quality, particularly employee well-being (EWB), on the productivity and performance of bank workers in Jaipur. The findings reveal a significant relationship between age, gender, experience, and employee well-being, emphasizing the influence of organizational factors such as opportunities for choice, job security, physical climate, staff support, and rewards on employee health and productivity. Perceived organizational support, work-to-family conflict, and supervisor support are identified as key predictors of job performance. The research underscores the need for banks to adopt measures such as flexible working hours and mental health support programs to enhance employee satisfaction and productivity. The study highlights the critical role of a supportive corporate climate in promoting both mental well-being and workplace achievements. However, limitations such as reliance on self-reported data and the study's focus on Jaipur's banking sector may affect the generalizability of the findings. Future research should explore other sectors and regions and utilize longitudinal approaches to assess the long-term impact of well-being initiatives. Overall, the study emphasizes that prioritizing employee well-being through policies like work-life balance and organizational support is essential for enhancing workplace satisfaction, productivity, and organizational effectiveness.

Corporate climate scores, carbon emissions, and investment in decarbonisation in the steel industry. What do ratings tell us?

Steel production is a critical economic activity and amongst the largest industrial consumers of energy. The industry faces a complex and costly task to decarbonise in line with global climate targets. This paper evaluates the performance of environmental and emissions scores within leading Environmental, Social and Governance (ESG) ratings products in capturing carbon emissions outcomes and investment in low-carbon production amongst major steel producers. We assess data for 75 steel producers, representing 65% of global production. We find no strong evidence that environmental or emissions scores reflect either levels of, or changes in, firms’ total greenhouse gas emissions or emissions intensity in the period 2013–2022. Overall, ‘good’ scores are not explained by available emissions or investment data. These findings for a critical industry emphasise the need for methodological transparency from all ratings providers, more research into ratings’ performance in reflecting outcomes and investments, and further policies to enhance disclosures from firms and rating agencies.

Developing a Dynamic Business Strategy: From Research and Goal Setting to Implementation and Evaluation

A dynamic company plan was essential for retaining competitiveness in today’s continuously shifting corporate climate. This review paper explored the effectiveness of combining continuous research, flexible goal formulation, agile execution, and continuing assessment to provide a strong framework for adjusting to market changes, technological breakthroughs, and competitive challenges. This review conducted a comprehensive evaluation of literature published using data from Scopus and Google Scholar. It employed thematic and meta-analytical methodologies to identify the key elements of dynamic strategy creation. The main discoveries consisted of the significance of using real-time data analytics to make well-informed decisions, the need for flexible goal-setting frameworks, and the advantages of Agile and Lean techniques in carrying out tasks. Furthermore, the implementation of ongoing evaluation and feedback processes was essential for improving tactics and maintaining a competitive edge. The review also highlighted problems such as the integration of real-time data, the establishment of flexible goals, and the promotion of organisational agility. Subsequent investigations prioritised examining the effects of developing technology and dynamic tactics on small and medium-sized firms (SMEs). This examination offered a thorough comprehension of how to manage and flourish in the current dynamic business environment by combining theoretical ideas and practical experiences. Keywords: Dynamic Business Strategy Continuous Research, Flexible Goal Formulation, Agile Execution Ongoing Assessment, Real-Time Data Analytics, Agile Methodologies Lean.

Who are the green transition experts? Towards a new research agenda on climate change knowledge

AbstractExperts play a significant role in shaping global and local norms on how societies should respond to the climate crisis. However, current scholarship on the relationship between expertise and climate change has not fully addressed recent transformations in the field, specifically the emergence and increasingly influential role of what we term “green transition expertise.” We define green transition expertise as a more applied, normative, and contextual form of climate change knowledge that is contrasted with the formalized, pure science of “climate expertise.” If climate experts assess the deteriorating state of the global climate, then transition experts tell states and corporations what they should do about it. We argue that if the social science of climate change knowledge is to further deepen its grasp of the politics of the green transition analytically and normatively, it must embrace a “post‐IPCC” research agenda that turns increasingly toward studying the power of transition experts in directing state and corporate climate action. Based on a review of the literature, we contrast the extant IPCC agenda with an emerging post‐IPCC agenda along three dimensions: expert cast (who are the experts?), expert content (what do they know?) and expert context (where are they located?). By marking a shift in each of these dimensions, the post‐IPCC agenda sensitizes the social science of climate change knowledge to overlooked and increasingly powerful forms of experts and expertise. To facilitate their study, we define six specific areas that require detailed attention as the post‐IPCC agenda develops.This article is categorized under: The Social Status of Climate Change Knowledge > Sociology/Anthropology of Climate Knowledge Policy and Governance > National Climate Change Policy Climate, History, Society, Culture > Ideas and Knowledge