Carbon Emissions and Climate Change Impact on Businesses Report

This report, prepared for ACC620, investigates the impact of carbon emissions and climate change on businesses. It begins with an introduction outlining the practical and theoretical motivations for the study, emphasizing the growing importance of low-carbon business strategies and the role of stakeholder theory in addressing climate change concerns. A literature review follows, exploring stakeholder theory, its limitations, and theoretical constructs such as the CDP index. The study examines the association between carbon emissions and stakeholder theory, proposing that companies' engagement with climate change and stakeholder issues is linked to their performance. The report highlights the importance of carbon disclosure, green finance, and environmental regulations in promoting sustainable business practices. The report is supported by references to academic literature and includes appendices for further detail.

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

4CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
implement environmental regulations. In addition, information based on public disclosure and
climate changes impacts can be attained from annual reports that can facilitate in suitable
stakeholder management strategies. Such strategies are implemented on the companies
centred on characteristics and purposes associated with stakeholder theory (Urry 2015).
2. Literature Review
2.1. Stakeholder Theory
Begg et al. (2018) examined stakeholder theory to serve as an efficient technique
through disclosing the voluntary environmental and social disclosures made from the side of
the companies. As per this theory, the companies have an objective to generate increased
value possible to ensure shareholder advantages. Cadez and Czerny (2016) indicated that
based on such perspective, for maintaining business sustainability along with profitability it is
vital for the business executives to address needs of different group of stakeholders. The
stakeholders generally consider effects of climate changes and disclosures on the
organization and the competitors. Stakeholders’ status is understood from their capability in
impacting companies along with their related businesses. The companies are likely to take
actions that can have a direct impact on stakeholders which in turn have negative impacts on
businesses.
2.2. Stakeholder Theory Limitations
It has been evidenced by Carney (2015) that an increased importance is given to the
shareholders from the aspect of the business organizations. Focused on the same, the
companies are making regular efforts in maximizing shareholders wealth. For addressing
such concerns, it is considered vital for the organizations to think beyond all its shareholders
along with increasing the organizations wealth. In this condition, certain amendments are
made within the stakeholder theory in the global marketplace. Conversely, this theory is

5CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
known to have certain drawbacks in its implementation. For such cause, some objections
have arisen focused on this theory which contradicts the fact that it is unethical to get
associated or impacted by most of the companies. The cause behind it is that managers will
not be able to fulfil their fiduciary duties to all its shareholders and this is entitled to be an
aspect of stakeholder paradox.
2.3. Theoretical Constructs
In the current research, the target observed within CDP is considered as dependent
variable and the stakeholder issue faced by the companies regarding climate change and use
of renewable resources are deemed as the independent variable. The companies develop the
CDP index that can be evaluated with support of the questions explained under:
 Is there any target company to decrease emission during the reporting period?
 Is there any difference in total emission target and is there some drastic impact of
carbon dioxide measurement decrease carried out by the businesses?
The current study will explain the above-mentioned questions through evaluating the
CDP index that the prior carbon risk management when measured by intensity of carbon
emission. This might be associated with disclosure quality regarding the environmental
regulation and actual emissions. The companies are majorly making increased efforts for
attaining better stakeholder management as abided by the part of the society relied on social
contract (Schndl et al. 2016). The corporate disclosure focused on climate change
information that has positioned as a significant research area. The below mentioned
explorations might be carried out in the current study:
 A wider climate change disclosure explained in the sustainability and annual
reports

6CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
 The disclosure is associated with uncertainties along with opportunities n
association with climate change
 The disclosures carried out in account for the CDP disclosure index at the time of
explaining the relationship between level of carbon emission and carbon
disclosure
The CDP index related with the disclosure level has association with strict
environmental or renewable sources-based regulations from government, the private sector
response in the direction of maintaining market structure of the country and environmental
suitability. The environmental disclosures have some drivers which consider data on risk
management and carbon disclosure. While certain control is implemented on carbon risk
management, the stakeholder theory gets rejected because of lack of suitable disclosures
(Evans et al. 2017).
2.4. Association between the Proxies (Carbon Emissions and Stakeholder Theory)
In the current research the identified dependent variable is gathered to be affected by
the independent variables. In such situation, the companies deal with certain stakeholder
concerns along with maintaining positive performance and it is vital for them to attain certain
CDP disclosures. An increased CDO association can support in enhancing business
performance that also facilitates them in increasing speed with help of which the necessary
strategic changes can be implemented (Wright and Nyberg 2017). It is likely that CDP can
diversify all its programs along with voluntary disclosure on climate change that has
considered considerable environmental regulations governance. In account for the same,
decreasing carbon emissions as well as green finance is considered for sustainable projects of
the businesses that are focused on energy efficiency and environmental protection (Ioannou,
Li and Serafeim 2015).

7CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
The disclosures those are associated with the CDP can increase awareness regarding
changes in climate, clean energy efficiency and maintaining stakeholder management relied
on environmental regulations and related accountability. At the time there is an increase in
voluntary carbon disclosures this signifies variability in the business along with advantages
associated with carbon measurement. This also includes reporting that encompass reputation
along with energy costs management. This has also resulted in political benefits provision
associated with carbon repairing and measurement (Tietenberg and Lewis 2016). For this
reason, it increases the requirement associated with climate change disclosures along with
environmental standards associated with the same.
3. Hypotheses
The hypothesis that will be tested in the recent research is indicated below:
 The business conducts of companies in dealing with climate change effects and
related stakeholder issues are associated with their performance.

8CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
References
Amran, A., Ooi, S.K., Wong, C.Y. and Hashim, F., 2016. Business strategy for climate
change: An ASEAN perspective. Corporate Social Responsibility and Environmental
Management, 23(4), pp.213-227.
Begg, K., Van Der Woerd, F. and Levy, D. eds., 2018. The business of climate change:
Corporate responses to Kyoto. Routledge.
Cadez, S. and Czerny, A., 2016. Climate change mitigation strategies in carbon-intensive
firms. Journal of Cleaner Production, 112, pp.4132-4143.
Carney, M., 2015. Breaking the tragedy of the horizon—climate change and financial
stability. Speech given at Lloyd’s of London, September, 29.
Evans, S., Zanni, A., Ford, A., Dawson, R., Barr, S., Walsh, C., Tight, M., Köhler, J.,
Harwatt, H., Batty, M. and Hall, J., 2017. A blueprint for the integrated assessment of climate
change in cities. In Green Citynomics (pp. 46-66). Routledge.
Fann, N., Nolte, C.G., Dolwick, P., Spero, T.L., Brown, A.C., Phillips, S. and Anenberg, S.,
2015. The geographic distribution and economic value of climate change-related ozone health
impacts in the United States in 2030. Journal of the Air & Waste Management
Association, 65(5), pp.570-580.
Ioannou, I., Li, S.X. and Serafeim, G., 2015. The effect of target difficulty on target
completion: The case of reducing carbon emissions. The Accounting Review, 91(5), pp.1467-
1492.
Lee, S.Y., Park, Y.S. and Klassen, R.D., 2015. Market responses to firms' voluntary climate
change information disclosure and carbon communication. Corporate Social Responsibility
and Environmental Management, 22(1), pp.1-12.

9CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
Schndl, H., Hatfield-Dodds, S., Wiedmann, T., Geschke, A., Cai, Y., West, J., Newth, D.,
Bynes, T., Lenzen, M. and Owen, A., 2016. Decoupling global environmental pressure and
economic growth: scenarios for energy use, materials use and carbon emissions. Journal of
Cleaner Production, 132, pp.45-56.
Tietenberg, T.H. and Lewis, L., 2016. Environmental and natural resource economics.
Routledge.
Urry, J., 2015. Climate change and society. In Why the social sciences matter (pp. 45-59).
Palgrave Macmillan, London.
Wright, C. and Nyberg, D., 2017. An inconvenient truth: How organizations translate climate
change into business as usual. Academy of Management Journal, 60(5), pp.1633-1661.

10CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
Appendices
Author Date Title Journal Type of
Paper
(Theoretic
al or
Empirical
)
If empirical,
research
method and
sample
If
empirical,
dependent
and
independen
t variables
100-word
summary
of
contributio
n to the
research
question
Amran, A.,
Ooi, S.K.,
Wong, C.Y.
and Hashim,
F., 2016
201
6
Business
strategy for
climate
change: An
ASEAN
perspective
Theoretica
l
The
businesses
to obtain
better
carbon
emissions,
trading of
the same
might result
in high
business
expenses
which
impacts the
competitive
edge
Begg, K.,
Van der
Woerd, F.
201
8
The business
of climate
change:
Theoretica
l
IV:
Community
Concern,
Technologic
al
innovation

11CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
and Levy, D.
eds., 2018.
Corporate
responses to
Kyoto
DV:
company’s
annual
report
disclosures
can also
support the
organization
s in
decreasing
carbon
emissions or
impacts of
climate
changes
through
obtaining
increased
profit from
emissions
trading.
Carney, M.,
2015.
201
5
Breaking the
tragedy of the
horizon—
climate
change and
financial
stability
Empirical Research
Design:
Time-series
quasi-
experimental
design,
Sample:
BHP Ltd.
stakeholder
theory is
relied on
two vital
ideas that
indicates
organization
s require
better
stakeholder
managemen
t in the

12CARBON EMISSIONS AND CLIMATE CHANGE IMPACT OF BUSINESS
businesses
Evans, S.,
Zanni, A.,
Ford, A.,
Dawson, R.,
Barr, S.,
Walsh, C.,
Tight, M.,
Köhler, J.,
Harwatt, H.,
Batty, M.
and Hall, J.,
2017.
201
7
A blueprint
for the
integrated
assessment of
climate
change in
cities
Theoretica
l
The
corporate
disclosure
focused on
climate
change
information
that has
positioned
as a
significant
research
area
Fann, N.,
Nolte, C.G.,
Dolwick, P.,
Spero, T.L.,
Brown, A.C.,
Phillips, S.
and
Anenberg,
S., 2015.
201
5
The
geographic
distribution
and economic
value of
climate
change-
related ozone
health
impacts in the
United States
in 2030
Theoretica
l
disclosure
quality
regarding
the
environment
al regulation
and actual
emissions.