External Pressures or Internal Governance – What Determines the Extent of Corporate Responses to Climate Change?

Abstract

To prevent adverse effects from climate change, it is vital to involve the private sector in mitigation efforts. So far, however, research has insufficiently addressed the determinants of corporate action in specific industries. Our paper aims at bridging this gap by empirically analyzing the global automotive industry's response to climate change mitigation issues. We use publicly available information from 105 sector leaders to investigate the role of external institutional pressures and intra-organizational governance in the extent of corporate action. Based on a multiple regression analysis, we find that organizational involvement and the integration of climate change into risk management exhibit the greatest influence. Moreover, companies with business activities that necessitate interaction with the end consumer tend to be most active. Our analysis furthermore indicates that neither the stringency of a firm's home country's climate policy regime nor the degree of internationalization is associated with a higher implementation level of response strategies.

The influence of managers' awareness of climate change, perceived climate risk exposure and risk tolerance on the adoption of corporate responses to climate change

“…The results provide diverse contributions to the literature on antecedents of climate action. Research has indeed focused on institutional and organizational antecedents, such as regulatory pressures (Damert & Baumgartner, 2018), resource endowments (Escobar & Vredenburg, 2011) and capabilities (Lee & Klassen, 2016). Similar studies draw from institutional theory and resource‐based view to identify external and internal constraints (e.g., regulations, resources and routine) that define feasible and appropriate organizational responses.…”

“…Drawing insights from the emerging literature on climate inaction and from corporate sustainability literature, the present study investigates antecedents of corporate responses to climate change by focusing on managerial factors. Although previous studies have investigated pressures at the organizational and institutional levels that contribute to shape corporate responses to climate change (Cadez, Czerny, & Letmathe, 2019; Damert & Baumgartner, 2018; Lee & Klassen, 2016; Lopes de Sousa Jabbour, Vazquez‐Brust, Chiappetta Jabbour, & Andriani Ribeiro, 2020), current understanding of the managerial antecedents of climate action is partial. Research has delved into the regulatory, competitive and societal pressures towards corporate engagement with climate issues, while overlooking the managerial factors that drive companies to embrace pressures towards climate action and resist motives for inaction (Daddi, Todaro, de Giacomo, & Frey, 2018).…”

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

“…An investigation to identify engaged behaviour has resulted in a focus on external stakeholder engagement. Damert and Baumgartner () study of climate change strategies about the automotive industry illustrates low centrality and high salience in an engaged organisation. The authors found that corporate climate action is rather linked to reputational concerns than to compliance issues.…”

Determinants and Characteristics of Korean Companies’ Carbon Management under the Carbon Pricing Scheme

“…Due to the higher use of the Internet and social networks of late, companies are more frequently exposure and judged on the basis of their environmental stewardship and business practices [57]. Companies with business activities that necessitate interaction with the end consumer tend to be most active [58]; however, together with other parties, including labor union and environmental NGO groups, media and social networks and customersy achieved a moderate score of 3 points or less due to probably small portion of samples companies with the product type of final goods, implying that these bodies had little effect on a company's carbon strategy efforts. …”