Corporate Response to Climate Change What Do Stakeholders Expect?
Prasad, Msv, Sri, B. Sandhya, Australasian Accounting Business & Finance Journal
This paper examines different perceptions on climate change management and disclosures from the viewpoint of stakeholders in Indian Corporations. The paper shows how climate change strategies and disclosures at different organizational levels can be linked to the societal and competitive contexts that companies face, embedded in a stakeholder view.
Companies are divided according to certain attributes - location, geographical spread, industry, degree of vertical integration and diversification, companies prioritizing particular stakeholder groups, and their climate change strategies and disclosures including internal measures, supply-chain measures and/or market-based measures that move beyond the supply chain are analyzed.
This paper attempts to illustrate how institutional, resource-based, supply chain and stakeholder views are all important to characterize and understand corporate strategic responses to a sustainability issue.
Keywords: climate change; corporate response; stakeholders; perception; environmental accounting; India.
Climate change is one of the environmental issues that has increasingly attracted corporate attention in recent years in India - a range of stakeholders, including governments, have started pay more attention to the potentially very serious consequences of climate change. They have also become increasingly aware of the need to take action on climate change. Companies have developed different strategies to deal with climate change. Since 1995, companies' political positions have gradually changed from opposition to climate measures to a more proactive approach or a ''wait-and-see'' attitude, and many have started to take market steps to be prepared to deal with regulation, or to go beyond that, considering risks and opportunities. Some companies apparently rely on the course set by their national governments following the adoption of the Kyoto protocol, and wait until the actual implementation of climate policy before they take action. Others, however, have decided to launch initiatives for emission reduction to anticipate future policy, societal or competitive developments, thus facilitating compliance or the development of green resources and capabilities (Kolk and Pinkse, 2004, 2005a, b).
Corporate responses to climate change differ considerably because of location-specific, industry-specific and company-specific factors (Kolk and Levy, 2004). Companies have to comply with different regulations depending on their global spread and the type of industries and activities in which they are involved. Public pressure to take action on climate change is to some extent company-specific, because it often relates to the reputation that a company has built up over the years. Some companies are affected directly by climate change as a result of changing weather patterns or ensuing government policy, while others are more indirectly involved through their stakeholders, broadly defined.
In view of these peculiarities, climate change is an issue that clearly shows the importance of different dimensions of strategic management as noted in the call for papers for the 2006 EABIS conference. Institutional, resource-based, supply chain and stakeholder perspectives are all important to characterize and understand current corporate strategic responses to this sustainability issue. In this paper, we will analyze aspects of climate change management in order to bring awareness amongst the stakeholders and to shed more light on what ''strategic corporate climate change management''. Given this issue is so important for corporate sustainability, we think that this paper makes a contribution to both research and practice.
2. Prior Research
The insights discussed in this paper build on previous research on the more specific elements of corporate responses to climate change (Kolk, 2001; Kolk, n.d.; Kolk and Levy, 2004; Kolk and Pinkse, 2004, 2005a, b, c; 2007; Levy and Kolk, 2002; Pinkse, 2007). …