Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks

Flammer, Caroline; Toffel, Michael W.; Viswanathan, K. G.

doi:10.2139/ssrn.3468896

Cited by 36 publications

(35 citation statements)

References 10 publications

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“…Firm incentives to join, or adopt, these programs are well-documented in the literature and can be loosely categorized as institutional drivers and firm-specific factors (Tashman et al, 2021). Institutional antecedents refer to various pressures from formal institutions, such as government regulators (Matsumura et al, 2013), and informal institutional factors such as social movements (B. G. King & Soule, 2007), stakeholder demands (Flammer et al, 2019), and firm visibility (Aronson & LaFont, 2020). Firm-specific factors may also motivate adoption, such as financial and environmental performance (Prakash & Potoski, 2012), characteristics of firm executive leadership (Lewis et al, 2014), or strategic fit with extant capabilities (Dowell & Muthulingam, 2017).…”

Section: Theorymentioning

confidence: 99%

Join In . . . and Drop Out? Firm Adoption of and Disengagement From Voluntary Environmental Programs

Callery

2021

Organization & Environment

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Voluntary environmental programs (VEPs) offer opportunities for companies and stakeholders to improve environmental outcomes valued by society in the absence of regulatory mandates. Research has addressed numerous antecedents for firm adoption of VEPs, enhancing knowledge of how stakeholders and firms engage on substantive issues of public importance. However, program adoption is dynamic, and stagnant participation rates may threaten program longevity when firms do not realize expected benefits. Prior literature has not sufficiently addressed the factors that compel firms to drop out. In this study I articulate three consequential drivers of firm commitment to VEPs—transparency, effort, and achievement—and empirically estimate their effects on firm disengagement from one such prominent program: CDP (formerly known as Carbon Disclosure Project). Findings indicate that firm transparency and effort represent powerful commitment mechanisms driving continued program participation. This study contributes to theory over multiple literatures related to VEP participation and offers practical guidance for both VEPs and firms.

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Section: Theorymentioning

confidence: 99%

Join In . . . and Drop Out? Firm Adoption of and Disengagement From Voluntary Environmental Programs

Callery

2021

Organization & Environment

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“…Part of the literature measures the quality of disclosure on the basis of the voluntary nature of a corporation's decisions. For example, Flammer et al (2019) [33] show that environmental shareholder activism increases the voluntary disclosure of climate change risks and, in turn, achieves a higher valuation, suggesting that investors value transparency with respect to climate change risks. Increases in sustainability disclosures driven by regulation are associated with increases in firm's financial health and market valuations, as reflected in Tobin's Q [34,35], in ROA [35,36], liquidity [35,36] in market confidence, thereby reducing stock market return risk through volatility [37][38][39] or through eliminating stock market speculation [40].…”

Section: Corporate Sustainable Disclosure and Performancementioning

confidence: 99%

Sustainable Disclosure Policies and Sustainable Performance of European Listed Companies

2020

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Sustainable disclosure has become common for companies to publicly signal their responsible behavior. Our research idea is twofold. First—irrespective of its content—better quality sustainable disclosure should identify more sustainability compliant companies. Second, we propose that those companies should have a more stable—and thus more sustainable—performance. Focusing on the top-capitalized companies of the EU-28 stock exchanges, we assess how GRI sustainable-reporting quality associates with stock-price volatility and distance-to-default. Our results, which resist various robustness checks, confirm that better quality sustainable disclosure couples with more sustainable performance. Thus, pro-disclosure policies could enhance long-term value creation.

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“…To their credit, some strategy scholars have started to recognize the importance of the macro environment in their scholarship (e.g. DesJardine and Durand, 2020;Flammer et al, 2021). However, much of this research remains embedded in traditional reductionist thinking and masks the complexities and dynamics of wicked problems.…”

Section: Introductionmentioning

confidence: 99%

Tackling wicked problems in strategic management with systems thinking

Grewatsch

Kennedy

Bansal

2021

Strategic Organization

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Strategy scholars are increasingly attempting to tackle complex global social and environmental issues (i.e. wicked problems); yet, many strategy scholars approach these wicked problems in the same way they approach business problems—by building causal models that seek to optimize some form of organizational success. Strategy scholars seek to reduce complexity, focusing on the significant variables that explain the salient outcomes. This approach to wicked problems, ironically, divorces firms from the very social-ecological context that makes the problem “wicked.” In this essay, we argue that strategy research into wicked problems can benefit from systems thinking, which deviates radically from the reductionist approach to analysis taken by many strategy scholars. We review some of the basic tenets of systems thinking and describe their differences from reductionist thinking. Furthermore, we ask strategy scholars to widen their theoretical lens by (1) investigating co-evolutionary dynamics rather than focusing primarily on static models, (2) advancing processual insights rather than favoring causal identification, and (3) recognizing tipping points and transformative change rather than assuming linear monotonic changes.

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Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks

Cited by 36 publications

References 10 publications

Join In . . . and Drop Out? Firm Adoption of and Disengagement From Voluntary Environmental Programs

Join In . . . and Drop Out? Firm Adoption of and Disengagement From Voluntary Environmental Programs

Sustainable Disclosure Policies and Sustainable Performance of European Listed Companies

Tackling wicked problems in strategic management with systems thinking

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