Practical Motivation
In the emerging competitive business surrounding, the modern businesses these days are dealing with fierce working environment. For this reason, these organizations are intended to prepare business strategies those will consider low carbon approaches. A huge number of organizations currently are making huge attempts for enhancing sustainability through decreasing their carbon emission effect. These approaches are implemented by the company in decreasing effect of the carbon emissions on the organizational environment which drastically effects business surrounding of the companies. Moreover, it is also intended to have negative sustainability and financial position impacts on the companies. For such causes, decreasing carbon emissions is deemed be simpler by implementing approaches in reducing their carbon footprint along with better carbon disclosure.
From analysing the indexes of recent carbon disclosure of the modern companies, it has also been gathered that carbon footprint has evaluated by 50% globally due to high emissions of greenhouse gasses. This is leading to elevating global warming all through the world with rising carbon dioxide rate. In account for the same, decreasing carbon emissions as well as green finance is considered for sustainable projects of the businesses that is focused on energy efficiency and environmental protection (Fann et al. 2015). Moreover, most of the previous researchers evidenced that for the businesses to obtain better carbon emissions, trading of the same might result in high business expenses which impacts the competitive edge.
Technological innovation can also support the organizations in decreasing carbon emissions or impacts of climate changes through obtaining increased profit from emissions trading. Past researches also elaborated that in the recent years the local businesses are focused on implementing tight regulations in reducing carbon emissions for all the companies. Moreover, use of renewable energy consideration in a situation of climate change is centred on implementing regulations concerning dependability of carbon disclosure reports. This is for abiding by the compliance needs which supports decision making of the management.
Stakeholder theory is associated with social disclosures and climate change considerations. Previous researches indicated a gap in explaining the process of stakeholder management process. Such gap is observed to exist due to the reason that there is some difference in company’s social performance and societal anticipations that is not deemed to be perceived or measured suitably. As the stakeholder theory remains underdeveloped, it is justified to implement such theory in social disclosure study. In explaining corporate disclosure, the stakeholder theory is relied on two vital ideas that indicate organisations require better stakeholder management in the businesses (Lee, Park and Klassen 2015).
Theoretical Motivation
Stakeholder theory includes certain explanations regarding social disclosure which is associated with social pressure and climate change effects. It is evidenced by researchers that this theory offers a better framework in elaborating environmental regulations determinants and outcomes. An explanation on carbon disclosure and use of renewable resources extent indicates a strategy to address the recognized stakeholder gap. In addition, it has also been elaborated by Amran et al. (2016) that the stakeholder focused companies consider that stakeholder management can be attained along with some constituencies. In such scenario, the objective of carbon disclosure is centred on decreasing damage and can persuade the society regarding the fact that disclosure is intended for sustainability advantage of consumers and the companies. It is also evidenced that maintaining better stakeholder management must perceive effect of climate changes differently from the ones those implement environmental regulations. In addition, information based on public disclosure and climate changes impacts can be attained from annual reports that can facilitate in suitable stakeholder management strategies. Such strategies are implemented on the companies centred on characteristics and purposes associated with stakeholder theory (Urry 2015).
Begg et al. (2018) examined stakeholder theory to serve as an efficient technique through disclosing the voluntary environmental and social disclosures made from the side of the companies. As per this theory, the companies have an objective to generate increased value possible to ensure shareholder advantages. Cadez and Czerny (2016) indicated that based on such perspective, for maintaining business sustainability along with profitability it is vital for the business executives to address needs of different group of stakeholders. The stakeholders generally consider effects of climate changes and disclosures on the organization and the competitors. Stakeholders’ status is understood from their capability in impacting companies along with their related businesses. The companies are likely to take actions that can have a direct impact on stakeholders which in turn have negative impacts on businesses.
It has been evidenced by Carney (2015) that an increased importance is given to the shareholders from the aspect of the business organizations. Focused on the same, the companies are making regular efforts in maximizing shareholders wealth. For addressing such concerns, it is considered vital for the organizations to think beyond all its shareholders along with increasing the organizations wealth. In this condition, certain amendments are made within the stakeholder theory in the global marketplace. Conversely, this theory is known to have certain drawbacks in its implementation. For such cause, some objections have arisen focused on this theory which contradicts the fact that it is unethical to get associated or impacted by most of the companies. The cause behind it is that managers will not be able to fulfil their fiduciary duties to all its shareholders and this is entitled to be an aspect of stakeholder paradox.
Literature Review
In the current research, the target observed within CDP is considered as dependent variable and the stakeholder issue faced by the companies regarding climate change and use of renewable resources are deemed as the independent variable. The companies develop the CDP index that can be evaluated with support of the questions explained under:
- Is there any target company to decrease emission during the reporting period?
- Is there any difference in total emission target and is there some drastic impact of carbon dioxide measurement decrease carried out by the businesses?
The current study will explain the above-mentioned questions through evaluating the CDP index that the prior carbon risk management when measured by intensity of carbon emission. This might be associated with disclosure quality regarding the environmental regulation and actual emissions. The companies are majorly making increased efforts for attaining better stakeholder management as abided by the part of the society relied on social contract (Schndl et al. 2016). The corporate disclosure focused on climate change information that has positioned as a significant research area. The below mentioned explorations might be carried out in the current study:
- A wider climate change disclosure explained in the sustainability and annual reports
- The disclosure is associated with uncertainties along with opportunities n association with climate change
- The disclosures carried out in account for the CDP disclosure index at the time of explaining the relationship between level of carbon emission and carbon disclosure
The CDP index related with the disclosure level has association with strict environmental or renewable sources-based regulations from government, the private sector response in the direction of maintaining market structure of the country and environmental suitability. The environmental disclosures have some drivers which consider data on risk management and carbon disclosure. While certain control is implemented on carbon risk management, the stakeholder theory gets rejected because of lack of suitable disclosures (Evans et al. 2017).
In the current research the identified dependent variable is gathered to be affected by the independent variables. In such situation, the companies deal with certain stakeholder concerns along with maintaining positive performance and it is vital for them to attain certain CDP disclosures. An increased CDO association can support in enhancing business performance that also facilitates them in increasing speed with help of which the necessary strategic changes can be implemented (Wright and Nyberg 2017). It is likely that CDP can diversify all its programs along with voluntary disclosure on climate change that has considered considerable environmental regulations governance. In account for the same, decreasing carbon emissions as well as green finance is considered for sustainable projects of the businesses that are focused on energy efficiency and environmental protection (Ioannou, Li and Serafeim 2015).
The disclosures those are associated with the CDP can increase awareness regarding changes in climate, clean energy efficiency and maintaining stakeholder management relied on environmental regulations and related accountability. At the time there is an increase in voluntary carbon disclosures this signifies variability in the business along with advantages associated with carbon measurement. This also includes reporting that encompass reputation along with energy costs management. This has also resulted in political benefits provision associated with carbon repairing and measurement (Tietenberg and Lewis 2016). For this reason, it increases the requirement associated with climate change disclosures along with environmental standards associated with the same.
The hypothesis that will be tested in the recent research is indicated below:
- The business conducts of companies in dealing with climate change effects and related stakeholder issues are associated with their performance.
References
Amran, A., Ooi, S.K., Wong, C.Y. and Hashim, F., 2016. Business strategy for climate change: An ASEAN perspective. Corporate Social Responsibility and Environmental Management, 23(4), pp.213-227.
Begg, K., Van Der Woerd, F. and Levy, D. eds., 2018. The business of climate change: Corporate responses to Kyoto. Routledge.
Cadez, S. and Czerny, A., 2016. Climate change mitigation strategies in carbon-intensive firms. Journal of Cleaner Production, 112, pp.4132-4143.
Carney, M., 2015. Breaking the tragedy of the horizon—climate change and financial stability. Speech given at Lloyd’s of London, September, 29.
Evans, S., Zanni, A., Ford, A., Dawson, R., Barr, S., Walsh, C., Tight, M., Köhler, J., Harwatt, H., Batty, M. and Hall, J., 2017. A blueprint for the integrated assessment of climate change in cities. In Green Citynomics (pp. 46-66). Routledge.
Fann, N., Nolte, C.G., Dolwick, P., Spero, T.L., Brown, A.C., Phillips, S. and Anenberg, S., 2015. The geographic distribution and economic value of climate change-related ozone health impacts in the United States in 2030. Journal of the Air & Waste Management Association, 65(5), pp.570-580.
Ioannou, I., Li, S.X. and Serafeim, G., 2015. The effect of target difficulty on target completion: The case of reducing carbon emissions. The Accounting Review, 91(5), pp.1467-1492.
Lee, S.Y., Park, Y.S. and Klassen, R.D., 2015. Market responses to firms’ voluntary climate change information disclosure and carbon communication. Corporate Social Responsibility and Environmental Management, 22(1), pp.1-12.
Schndl, H., Hatfield-Dodds, S., Wiedmann, T., Geschke, A., Cai, Y., West, J., Newth, D., Bynes, T., Lenzen, M. and Owen, A., 2016. Decoupling global environmental pressure and economic growth: scenarios for energy use, materials use and carbon emissions. Journal of Cleaner Production, 132, pp.45-56.
Tietenberg, T.H. and Lewis, L., 2016. Environmental and natural resource economics. Routledge.
Urry, J., 2015. Climate change and society. In Why the social sciences matter (pp. 45-59). Palgrave Macmillan, London.
Wright, C. and Nyberg, D., 2017. An inconvenient truth: How organizations translate climate change into business as usual. Academy of Management Journal, 60(5), pp.1633-1661.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
