Mitigating climate change – how do corporate strategies differ?

Many companies are facing increasing pressure by governments, shareholders and other stakeholders to reduce their CO2 emissions in order to mitigate climate change. The importance of managing CO2 emissions and crafting adequate CO2 strategies has increased for those companies affected. We present a framework that conceptualizes a company's CO2 strategy as the focus on one or a combination of several strategic objectives: CO2 compensation, CO2 reduction and carbon independence. In order to investigate the CO2 strategies of a worldwide sample of 91 electricity producers we perform a content analysis of their answers to the Carbon Disclosure Project (CDP). We demonstrate the measures the companies take to manage their emissions, the CO2 strategies they adopt and antecedents that influence these strategies. We find that half of the companies take parallel emission management measures that aim at all three strategic objectives, while the other half pursue selected objectives only. We also find that companies with different CO2 strategies significantly differ in terms of regional affiliation, company size and absolute amount of CO2 emissions, while we could not identify a significant difference in relative CO2 emissions. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.

[1]  Sanjay Sharma,et al.  Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities , 1998 .

[2]  Sanjay Sharma.  Managerial Interpretations and Organizational Context as Predictors of Corporate Choice of Environmental Strategy , 2000 .

[3]  Kendall Roth,et al.  Why Companies Go Green: A Model of Ecological Responsiveness , 2000 .

[4]  Technological Responses to Climate Change in the Energy Sector , 2002 .

[5]  Seth Dunn,et al.  Down to Business on Climate Change , 2002 .

[6]  Robert Repetto,et al.  Environmental exposures in the US electric utility industry , 2003 .

[7]  M. Toffel,et al.  Stakeholders and Environmental Management Practices: An Institutional Framework , 2004 .

[8]  F. Sioshansi.  Global climate change: here to stay , 2005 .

[9]  A. Kolk,et al.  Business Responses to Climate Change: Identifying Emergent Strategies , 2005 .

[10]  P. Williamson,et al.  Gaining Competitive Advantage in a Carbon-constrained World:: Strategies for European Business , 2005 .

[11]  J. González‐Benito,et al.  A review of determinant factors of environmental proactivity , 2006 .

[12]  Olivier Boiral,et al.  Global Warming: Should Companies Adopt a Proactive Strategy? , 2006 .

[13]  Volker H. Hoffmann,et al.  Business, climate change and emissions trading: Taking stock and looking ahead , 2007 .

[14]  J. Pinkse.  Corporate intentions to participate in emission trading , 2007 .

[15]  O. Edenhofer,et al.  Mitigation from a cross-sectoral perspective , 2007 .

[16]  Volker H. Hoffmann,et al.  EU ETS and Investment Decisions:: The Case of the German Electricity Industry , 2007 .

[17]  Walter Wehrmeyer,et al.  How warm is the corporate responses to climate change? Evidence from Pakistan and the UK , 2008 .

[18]  V. Hoffmann,et al.  A taxonomy for regulatory uncertainty—application to the European Emission Trading Scheme , 2008 .

[19]  Thomas J. Douglas,et al.  Choosing strategic responses to address emerging environmental regulations: Size, perceived influence and uncertainty , 2008 .