Carbon Emissions and Climate Change Impact on Businesses

Running head: CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF
BUSINESS
Carbon Emissions and Climate Change Impact on Businesses
Name of the University:
Name of the Student:
Authors Note:

1CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
Table of Contents
1. Introduction............................................................................................................................2
1.1. Practical Motivation....................................................................................................2
1.2. Theoretical Motivation....................................................................................................3
2. Literature Review...................................................................................................................4
2.1. Stakeholder Theory.........................................................................................................4
2.2. Stakeholder Theory Limitations......................................................................................4
2.3. Theoretical Constructs....................................................................................................5
2.4. Association between the Proxies (Carbon Emissions and Stakeholder Theory)............6
3. Hypotheses.............................................................................................................................7
References..................................................................................................................................8
Appendices...............................................................................................................................10

2CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
1. Introduction
In the emerging competitive business surrounding, the modern businesses these days are
dealing with fierce working environment. For this reason, these organizations are intended to
prepare business strategies those will consider low carbon approaches. A huge number of
organizations currently are making huge attempts for enhancing sustainability through
decreasing their carbon emission effect. These approaches are implemented by the company
in decreasing effect of the carbon emissions on the organizational environment which
drastically effects business surrounding of the companies. Moreover, it is also intended to
have negative sustainability and financial position impacts on the companies. For such
causes, decreasing carbon emissions is deemed be simpler by implementing approaches in
reducing their carbon footprint along with better carbon disclosure.
1.1. Practical Motivation
From analysing the indexes of recent carbon disclosure of the modern companies, it has
also been gathered that carbon footprint has evaluated by 50% globally due to high emissions
of greenhouse gasses. This is leading to elevating global warming all through the world with
rising carbon dioxide rate. In account for the same, decreasing carbon emissions as well as
green finance is considered for sustainable projects of the businesses that is focused on
energy efficiency and environmental protection (Fann et al. 2015). Moreover, most of the
previous researchers evidenced that for the businesses to obtain better carbon emissions,
trading of the same might result in high business expenses which impacts the competitive
edge.
Technological innovation can also support the organizations in decreasing carbon
emissions or impacts of climate changes through obtaining increased profit from emissions
trading. Past researches also elaborated that in the recent years the local businesses are

3CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
focused on implementing tight regulations in reducing carbon emissions for all the
companies. Moreover, use of renewable energy consideration in a situation of climate change
is centred on implementing regulations concerning dependability of carbon disclosure
reports. This is for abiding by the compliance needs which supports decision making of the
management.
1.2. Theoretical Motivation
Stakeholder theory is associated with social disclosures and climate change
considerations. Previous researches indicated a gap in explaining the process of stakeholder
management process. Such gap is observed to exist due to the reason that there is some
difference in company’s social performance and societal anticipations that is not deemed to
be perceived or measured suitably. As the stakeholder theory remains underdeveloped, it is
justified to implement such theory in social disclosure study. In explaining corporate
disclosure, the stakeholder theory is relied on two vital ideas that indicate organisations
require better stakeholder management in the businesses (Lee, Park and Klassen 2015).
Stakeholder theory includes certain explanations regarding social disclosure which is
associated with social pressure and climate change effects. It is evidenced by researchers that
this theory offers a better framework in elaborating environmental regulations determinants
and outcomes. An explanation on carbon disclosure and use of renewable resources extent
indicates a strategy to address the recognized stakeholder gap. In addition, it has also been
elaborated by Amran et al. (2016) that the stakeholder focused companies consider that
stakeholder management can be attained along with some constituencies. In such scenario,
the objective of carbon disclosure is centred on decreasing damage and can persuade the
society regarding the fact that disclosure is intended for sustainability advantage of
consumers and the companies. It is also evidenced that maintaining better stakeholder
management must perceive effect of climate changes differently from the ones those