Exploring the Relationship between Stakeholder Theory and Carbon Disclosure

The research aims to investigate the relationship between Stakeholder Theory and Carbon Disclosure. The conceptual model is based on stakeholder theory, carbon disclosure, stakeholder trust, organizational justice, corporate social responsibility, economic responsibility, legal responsibility, sustainability normative demands, and transparency of business strategies. The study uses a post-positivism research philosophy, deductive approach, and descriptive purpose. A non-probability sampling method was used to select 250 companies from various industries, including electronic, beverage, food, automobile, and information technology multinational companies. Secondary data from the CPD 2017 Survey was analyzed using SPSS to describe whether carbon disclosure represents the highest level of direct responsibility according to Stakeholder Theory.

Running head: RESEARCH PROJECT
MGT723 Research Project
Semester 2 2017
Assessment Task 1: Research Proposal
Student Name:
Assigned research topic: Impact of Stakeholder Theory on Carbon Disclosure

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Table of Contents
1.0 Literature Review – Summary...................................................................................................2
2.0 Conceptual Model......................................................................................................................5
3.0 Hypotheses.................................................................................................................................5
4.0 Proxy Measures for Theoretical Constructs..............................................................................6
5.0 Research Method.......................................................................................................................7
6.0 Reference List............................................................................................................................9
7.0 Appendix..................................................................................................................................10

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1.0 Literature Review – Summary
Harrison and Wicks (2013) stated that stakeholder theory resembles the business ethics
and organisational management that illustrates the business value and morale to manage the
business approaches of the organisation. Horisch, Freeman and Schaltegger (2014) furthermore
depict that stakeholder theory represents an ethical perspective. Verbeke and Tung (2013)
supported the argument by illustrating that an organisation should be concerned to its
shareholders’ interest. There are majorly three components of the stakeholder theory, legal
responsibility organisational justice, corporate social responsibility, organisational
trustworthiness, transparency of business strategy.
The legal responsibility of the organisation is to follow all the legislation related with the
betterment of the economic connection and standard of living of the community. These legal
actions are taken collaboratively by the local governing bodies and the managing authorities of
the organisation. In this way, the trust with the major stakeholder that is the government can be
obtained. Harrison and Wicks (2013) moreover stated that report for carbon disclosure also
reveals the normative sustainability demands for protecting the planet. This disclosure of the
carbon emission report also provides stakeholder trust that is a major component of the
stakeholder theory.
Moreover, the fairness in the workplace sensed by the stakeholders is termed as
organisational justice. Shafiq et al. (2014) stated that organisation justice comprises of many
components distributive justice, procedural justice and informational justice. Horisch, Freeman
and Schaltegger (2014) furthermore depict that distributive justice illustrates the fairness
associated with decision outcomes that can be regarding pay or praise. On the other hand, the
procedural justice refers to the fairness of the processes that denotes the consistency, accuracy

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and ethicality of the organisation. Thus, it can be said that if an organisation discloses all its
carbon emission records and take effective steps so that the carbon impact can be reduced, the
procedural justice can be attained. In addition to that, informational justice relates to the
adequacy of the explanations in terms of timeliness, specificity and truthfulness. In this way, the
carbon disclosure represents the sustainability normative demands that are impacted by the
component of organizational justice of the stakeholder theory.
In terms of the component corporate social responsibility, Harrison and Wicks (2013)
stated that CSR) is an important economic phenomenon with the parties concerned like-
investors, governments, NGOs, employees and consumers. Verbeke and Tung (2013)
furthermore stated that if an organization follows CSR activity regarding carbon disclosure and
reducing their impact on the planet, the government also provides economic support. Moreover,
the customer also prefers such organisation and hence, CSR activity thus influences economic
responsibility.
Lastly, the aspects of organisational trustworthiness and transparency of business
strategy, the sustainability demands can be fulfilled regarding carbon disclosure (Mason and
Simmons 2014). The disclosure of the actual carbon rating thus attains the legal responsibility as
all the organisational and regulatory legislation are attained. Taken from the instance, from the
report “CEE-edition-climate-change-report", that data about Poland's companies are considered
and assessed based on their CDP score and number of years they have been reporting to CPD.
Most of the companies got the score C or D and their number of association with the CDP is an
average of 3 to 4 years. The score “C” represents that there is awareness in the company to
overcome climate change; whereas, D refers to the score where company failed to show such
awareness (See Appendix, Figure 2)

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Image 1: CDP Scores of company
(Source: CDP Climate Change Report 2016- CEE edition 2016)
Thus, it can be said that 80% of the business report to CPD to prove their ethical
procedure of doing business (Mason and Simmons 2014). Furthermore, it can be said that carbon
disclosure is necessary to establish a benchmark against the peer group. This allows all the other
organisation to develop a business strategy through which their carbon emission can be
controlled.

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Stakeholder Theory Carbon Disclosure
Stakeholder Trust
Organizational
trustworthiness
Transparency of
business strategies
Organizational
Justice
Corporate Social
Responsibility
Economic
Responsibility
Legal Responsibility
Sustainability
normative demands
Sustainability of Business
Ethical reputation of the business
Positive concern on environment
2.0 Conceptual Model
Image 1: Conceptual Framework
(Source: Created by Author)
3.0 Hypotheses
H0: Stakeholder Theory does not have a significant impact on Carbon Disclosure
H1: Stakeholder Theory have a significant impact on Carbon Disclosure

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4.0 Proxy Measures for Theoretical Constructs
Theoretical
Constructs
Proxy Measures Dependent Variable (DV)
Independent Variable (IV)
Control Variable (CV)
Sources
Stakeholder
Theory
- Stakeholder Trust
- Organizational Justice
- Corporate Social
Responsibility
- Organizational trustworthiness
- Transparency of business
strategies
Independent Variable (IV) - Academic
Research
Papers
-Journal
Articles
Carbon
disclosure
Legal Responsibility
Economic Responsibility
Sustainability normative
demands
Details present in the CPD
2017 Survey spreadsheet of
different companies
Dependent variable (DV) CPD 2017
Survey
2017
Respondents
Data
disclosed by
CPD
List of
Measures
from CPD
Survey
Industry Details present in the CPD Control Variable (CV) CPD 2017

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Nation 2017 Survey spreadsheet of
different companies
Survey
Industry
Field
Details present in the CPD
2017 Survey spreadsheet of
different companies
Control Variable (CV) CPD 2017
Survey
Table 1: Proxy Measures for Theoretical Constructs for the Research
(Source: Created by Author)
5.0 Research Method
The data are collected secondarily from the CPD details about different company belong
to the different nation. Companies are selected from different backgrounds like electronic
companies, Beverage Company, food industry, automobile company and information technology
multinational companies. The strategy that is selected to classify the selected industry is Global
Industry Classification Standard (GICS). The post-positivism research philosophy is utilised as
both primary and secondary data is used. Moreover, deductive research approach is used as not
theories and models are developed through the research and the literature is explained based on
the previously developed theories. In addition to that, descriptive research purpose is used as
data obtained through secondary details are processed and described by aligning with the
research aim. Non-probability method of sampling is used as not all the companies across the
world are taken into considered for participating in the research. In the research study, the
sample size of 250 companies is taken into consideration. Moreover, the secondary data is
analysed to describe whether or not carbon disclosure represents the highest level of direct
responsibility of the stakeholder theory. The numerical data obtained from the CPD survey report

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from 2017 for the considered samples are analysed through SPSS. The research ethics that is
followed in this article is that all the data are utilised for the research purpose any and not for any
business benefit. All the data thus protected properly to obtain the desired research result.

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6.0 Reference List
CDP Climate Change Report 2016- CEE edition. (2016). 1st ed. pp.5-12.
CPD - The CPD Certification Service., 2017. CPD Explained. [online] Available at:
https://cpduk.co.uk/explained [Accessed 5 Sep. 2017].
Finance.yahoo.com. (2017). CPD.TO : Summary for ISHARES SP TSX CDN PREF IDX ETF -
Yahoo Finance. [online] Available at: https://finance.yahoo.com/quote/cpd.to?ltr=1 [Accessed 5
Sep. 2017].
Harrison, J.S. and Wicks, A.C., 2013. Stakeholder theory, value, and firm performance. Business
ethics quarterly, 23(1), pp.97-124.
Hörisch, J., Freeman, R.E. and Schaltegger, S., 2014. Applying stakeholder theory in
sustainability management: Links, similarities, dissimilarities, and a conceptual framework.
Organization & Environment, 27(4), pp.328-346.
Mason, C. and Simmons, J., 2014. Embedding corporate social responsibility in corporate
governance: A stakeholder systems approach. Journal of Business Ethics, 119(1), pp.77-86.
Shafiq, A., Klassen, R.D., Johnson, P.F. and Awaysheh, A., 2014. Socially responsible practices:
an exploratory study on scale development using stakeholder theory. Decision Sciences, 45(4),
pp.683-716.
Verbeke, A. and Tung, V., 2013. The future of stakeholder management theory: A temporal
perspective. Journal of Business Ethics, 112(3), pp.529-543.