Special Issue: Climate Change: Challenging Business, Transforming Politics
Climate Change: Challenging Business, Transforming Politics
Chukwumerije Okereke, Bettina Wittneben, and Frances Bowen
Abstract: Climate change challenges contemporary management practices and ways of organizing. While aspects of this challenge have been long recognized, many pertinent dimensions are less effectively articulated. Based on contemporary literature and insights from articles submitted to this special issue, the guest editors of this special issue highlight some of the challenges posed by climate change to government and business, and indicate the range of options and approaches being adopted to address these challenges.
Corporate Perceptions of Climate Science: The Role of Corporate Environmental Scientists
Sandra Rothenberg and David L. Levy
Abstract: Although there has been some growing recognition of the role of private actors in international environmental regimes, little attention has been paid to the role of the private sector at the science–policy interface. Because the automobile industry plays a crucial role in mitigation of greenhouse gases, successful policy requires not just the assent but the active cooperation of this sector. Such cooperation, however, requires some institutional acceptance that climate change is indeed a significant risk. In this article, the authors look at the early stages of the automobile industry’s engagement with the discourse on climate change. The authors focus, in particular, on the role of corporate scientists in two U.S. automobile companies in translating this discourse. Acting as boundary spanners and institutional entrepreneurs, these individuals influenced both corporate perceptions of and responses to climate change science.
Much Ado About Nothing? How Banks Respond to Climate Change
Bettina Furrer, Jens Hamprecht, and Volker H. Hoffmann
Abstract: The effect of the financial sector on climate change remains largely underestimated. Banks can steer investments of their customers in low-emission technologies and adjust the conditions of loans that they provide to greenhouse gas intensive sectors. However, the authors’ research shows that few banks take such substantive action when they implement their climate strategy. The authors analyze 114 listed banks around the world and find evidence for deflective decoupling. This evidence means that banks that implement a climate strategy often decouple it from their main value creating processes such as lending and investment. Those banks that engage in more substantive action still combine it with symbolic activities which may facilitate the strategic change process. This study contributes to the literature on organizations and the natural environment as the authors specify which kind of banks implement substantive climate strategies. This research holds important implications for policy makers and managers who aim to implement a climate strategy in organizations that create value through information and financial flows but not with a physical transfer of goods.
Surprise as a Catalyst for Including Climatic Change in the Strategic Environment
Nardia Haigh and Andrew Griffiths
Abstract: This article examines what prompted electricity supply organizations to include changing climatic conditions as key elements of the strategic environment. Utilizing themes emerging from inductive analysis, the authors explain how and why surprising climatic events drove the organizations to begin including climate trends in their strategy development and planning processes. Results indicate that organizations were surprised climate was becoming more unpredictable, was directly affecting their operations, and was challenging long-held assumptions about climatic patterns. Our findings suggest that adaptation to climate change occurs predominantly as a reaction to climatic surprise, rather than a preemptive response to increasing awareness, and perceived uncertainty and risks as suggested by previous studies. Results also show that organizations are beginning to conceptually link changes in local climatic conditions to the global issue of climate change; though such linkages are not necessarily important to the inclusion of climate in the strategic environment.
The ClimateWise Principles: Self-Regulating Climate Change Risks in the Insurance Sector
Abstract: In recent years, the private insurance sector has started to incorporate climate change issues into its standard business practices and even begun to lobby governments to regulate and reduce global greenhouse gas (GHG) emissions. The establishment of the ClimateWise Principles (ClimateWise) in 2007 embodies this effort. ClimateWise is an example of what scholars studying corporate strategy identify as a self-regulatory institution. To date, however, academic scholarship has failed to explain the emergence and function of ClimateWise, a unique initiative designed to leverage the insurance industry’s technical and political authority in governing climate change risks. This article will make the case that ClimateWise emerged in response to strategic incentives to reduce exposure to climate change risks, but that the form of this unusual self-regulatory institution was driven by institutional conditions.
Influencing Climate Change Policy: The Effect of Shareholder Pressure and Firm Environmental Performance
Cynthia E. Clark and Elise Perrault Crawford
Abstract: Firms face a great deal of pressure to engage in the heightened debate about climate change policies and practices. Building on the corporate political strategy literature, the authors evaluate how firms choose to influence those policies when faced with pressure from shareholders and activists. The authors triangulate firms’ choice of corporate political activity (CPA) with their environmental performance to draw out whether performance affects the firm’s choice of engagement level in CPA. The authors find that firms in the S&P 500 use a form of constituency-building (CB) more often than a financial-incentive (FI) tactic and that environmental performance moderates this choice. To date, there is little research connecting corporate political activity and climate change policies and performance. This research is intended to contribute to this literature gap.
Addressing the Climate Change—Sustainable Development Nexus: The Role of Multistakeholder Partnerships
Jonatan Pinkse and Ans Kolk
Abstract: While calls are being made to deal with the linkages between climate change and sustainable development to arrive at an integrated policy, concrete steps in this direction have been very limited so far. One of the possible instruments through which both issues may be approached simultaneously is a multistakeholder partnership, a form of governance with the potential to address existing regulatory, participation, resource and learning gaps as it harnesses the strengths of private, public, and nonprofit partners. There is some insight into partnerships for climate change, but largely limited to developed countries, and those in developing countries most often do not involve companies. To help fill this gap, this article explores the role of multistakeholder partnerships in addressing climate change and sustainable development in developing-country settings. It elaborates on the governance function of partnerships, on actor involvement, the gaps addressed, as well as synergies and trade-offs in the climate change-sustainable development nexus and how partnerships may help address them. As the number of such partnerships is still limited, we discuss seven illustrative partnerships and draw conclusions as to further conceptualizations and implications for research and practice.
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