Rationales for corporate climate change target setting and reporting : an investigation. (2021)
Type of ContentTheses / Dissertations
Thesis DisciplineInformation Systems
Degree NameDoctor of Philosophy
PublisherUniversity of Canterbury
With the increasing acceptance of climate change as one of the most challenging political, societal and business issues globally and nationally, some New Zealand firms have decided to adhere to a specific emissions reduction target to show their commitment to climate change mitigation. The New Zealand government has expressed a commitment to encourage change through the introduction of the Zero Carbon Act, which sets a national target of net zero-carbon by 2050. Nevertheless, it is still unclear what this means in terms of ecological resilience and planetary climate change boundaries when firms set their targets. This research asks why firms would or would not adopt emissions reduction target setting and explores the extent to which such targets are connected to scientific thresholds for climate, thus anticipating an additional constraint on voluntary climate target-setting and reporting.
To understand the rationales and practices of corporate climate target setting and reporting, content analysis (first phase) and discourse analysis (second phase) were used to analyse corporate public reports of the top 50 NZX listed companies (by market capitalisation) which enjoyed consecutive exchange membership for the years 2012 to 2016. This was supplemented by twenty-nine interviews with corporate senior managers representing twenty-three companies. These interviewees are responsible for continuing or for looking into their organisational climate change actions.
The findings reveal that a large number of companies (31 of the 50 sampled) failed to disclose any climate-related information in their public reports for the period 2012 to 2016. The climate information reported by 19 of the companies was generally made in a surprisingly opaque way, indicating that there is a lot of room for New Zealand companies to improve their climate reporting. Rationales for climate mitigation mirror those for wider social and environmental reporting. Companies report for a variety of reasons, including as per their business case, regulatory compliance, social responsibility, competitive advantage, public relations and as ‘a balancing act’, indicating a ‘win-win’ logic.
In terms of connection to the wider planetary boundaries for climate change, the findings indicate a large number of companies in the sample failed to consider their climate mitigation efforts. More specifically, emissions reduction target setting and reporting which describe contributions to ecological sustainability and resilience enhancement were often neglected. Many of the sampled companies prefer setting intensity targets to absolute targets, and most ignore science-based targets. Their targets are mostly associated with companies’ direct emissions. These might be misleading, underestimating emissions and the full carbon impacts of corporate activities. The observations support legitimacy theory, which indicates that some companies are likely to pursue a symbolic approach focusing on low-hanging fruit without making any radical change in their GHG emissions performance. However, the study also found evidence of mixed institutional pressure factors for adopting climate change mitigation amongst those sampled companies. Over time, there is an increase in the number of companies reporting and setting climate change targets, which might be explained by an increase in regulatory and normative pressures. However, there is limited evidence showing mimetic isomorphism even though investors (especially overseas investors of NZX companies) were found to have a strong interest in corporate emissions targets and performance.
The research makes contributions that enhance an understanding of the rationales for corporate emissions reduction target setting; the sense-making of these targets and the challenges associated with encouraging corporate emissions reductions in the near future.
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