Stakeholder Theory and Carbon Emission: A Literature Review Report

This report presents a literature review and analysis of the relationship between carbon emissions and stakeholder theory, specifically within the chemical industry. It examines how stakeholder pressure and incentives influence corporate decisions regarding carbon emission reduction. The report identifies key theoretical constructs, dependent and independent variables, and control variables. A conceptual model and hypotheses are developed to investigate whether there is a significant difference in carbon emissions between companies that receive incentives and those that do not. The research employs a quantitative approach, utilizing a sample of 60 companies from a secondary dataset, and proposes the use of statistical analysis (SPSS) to test the hypotheses. The study aims to contribute to the understanding of how stakeholder engagement and incentive programs can drive positive environmental outcomes within the chemical sector. References to seminal papers are provided.

Running Head: CARBON EMISSION AND STAKEHOLDER THEORY
Carbon Emission and Stakeholder Theory
Name of the Student
Name of the University
Student ID

1CARBON EMISSION AND STAKEHOLDER THEORY
Literature Review – Summary
Nowadays, the use of utilities that are based on carbon emissions, are of use in most of
the companies. Due to the use of these utilities, the carbon content in the atmosphere is
increasing and hence, there are significant changes in the atmosphere as can be observed1. Thus,
it is important for the corporate world to adopt necessary measures so that the emission of carbon
can be reduced. The carbon quantity emitted by the companies are quite high and this creates
radiation in the atmosphere of the earth. This radiation is extremely harmful for plants. The death
of plants is the major cause for the changes in the climate and the atmosphere2. Thus, the
organizations have started to adopt necessary measures so as to reduce the rate of carbon
emissions so that the environmental changes can be controlled. The chemicals industry is known
to have a huge amount of emission of carbon and are considered as a vital industry in terms of
polluting the atmosphere. Almost 7% of the greenhouse gas emissions are expected to come
from this industry3. This industry mainly works on synthesizing the core, intermediate and end
products that are needful to humans. Moreover, plastics, fertilizers, industrial gases, composite
materials and a lot of other products are produced by this industry and provided to other
industries. All of the products produced are not environment friendly. Thus, this huge percentage
of emission comes from this particular industry4.
The influence of the Stakeholders on any organization is huge. Description of the nature
of the firm, the managers’ thoughts about managing the companies, the thoughts of the members
1 Lee, Su‐Yol, and Robert D. Klassen. "Firms’ response to climate change: the interplay of business uncertainty and
organizational capabilities." Business Strategy and the Environment 25.8 (2016): 577-592.
2 Depoers, Florence, Thomas Jeanjean, and Tiphaine Jérôme. "Voluntary disclosure of greenhouse gas emissions:
Contrasting the carbon disclosure project and corporate reports." Journal of Business Ethics 134.3 (2016): 445-461.
3 Hahn, Rüdiger, Daniel Reimsbach, and Frank Schiemann. "Organizations, climate change, and transparency:
Reviewing the literature on carbon disclosure." Organization & Environment 28.1 (2015): 80-102.
4 Chiu, Tzu-Kuan, and Yi-Hsin Wang. "Determinants of social disclosure quality in Taiwan: An application of
stakeholder theory." Journal of business ethics 129.2 (2015): 379-398.

2CARBON EMISSION AND STAKEHOLDER THEORY
of the board on managing the frauds to the companies and also identifying the methods of
management of other companies. Stakeholders to a company can be one particular person, a
group of person, an organization or even a society5. The investors of a company are usually
interested in reducing the useless expenses and increase the benefits that a company can obtain
from a particular plan. Thus the company must try to maintain the plan proposed by the
stakeholders. While talking about the stakeholders, the first category of people or group that
come to mind are the shareholders or the investors as well as the government6. Other than the
shareholders of the company, the employees, customers and other business associates are also
considered as the stakeholders of a company as they are also affected by the performance of the
company. A lot of new strategies have been emerging for the reduction in emission of carbon by
the chemical industry7. These strategies include introduction of carbon tax, trading schemes
relating emissions, etc. The government of the respective countries has also adopted techniques
to reduce the emissions. These initiatives include discharges in exchanging, jointly implementing
the mechanism of clean management. This facilitates the companies in reducing the emission of
greenhouse gases with the help of different gatherings. This will be helpful in increasing the
benefits of the companies8.
Dependent Variable
5 Liesen, Andrea, et al. "Does stakeholder pressure influence corporate GHG emissions reporting? Empirical
evidence from Europe." Accounting, Auditing & Accountability Journal 28.7 (2015): 1047-1074.
6 Ben-Amar, Walid, Millicent Chang, and Philip McIlkenny. "Board gender diversity and corporate response to
sustainability initiatives: Evidence from the carbon disclosure project." Journal of Business Ethics 142.2 (2017):
369-383.
7 Yunus, Somaiya, Evangeline Elijido-Ten, and Subhash Abhayawansa. "Determinants of carbon management
strategy adoption: Evidence from Australia’s top 200 publicly listed firms." Managerial Auditing Journal 31.2
(2016): 156-179.
8 Lee, Su‐Yol, Yun‐Seon Park, and Robert D. Klassen. "Market responses to firms' voluntary climate change
information disclosure and carbon communication." Corporate Social Responsibility and Environmental
Management 22.1 (2015): 1-12.

3CARBON EMISSION AND STAKEHOLDER THEORY
The dependent variable that can be considered for this research is the percentage change
in the percentage of emission of CO2 in the year 2013 from the year 2012. The data collected
from the CDP survey shows the percentage changes in the CO2 emission by different companies
over the globe for a year. These changes are mostly due to the influence of the decisions taken by
the stakeholders.
Independent Variable
The independent variable that has been considered for this study is the variable which
indicates whether any incentives has been produced to the management of the companies. It can
be seen from the CDP survey data that some of the companies enjoy the extra incentive and
some others do not. There can be differences in the initiatives taken to reduce the emissions of
carbon by these two types of companies that receive and do not receive incentives.
Control Variable
In the dataset, there are companies across the globe. Data on a lot of companies are
present in the dataset. It will not be a good research if all types of companies across the globe are
considered together for the research. The emissions of carbon are different depending on the type
of industries. Thus, the research is specified to only the chemical industry across the globe. Thus,
the type of industry is considered as the control variable for this research.
The main aim of this research is to evaluate whether there is any significant difference in
the carbon emissions of the companies that enjoy incentive and that do not enjoy incentive across
the globe for the years 2012 to 2013. The emissions of carbon by the companies are entirely
dependent on the influence that the stakeholders provide to the companies as well as on the
initiatives that will be provided to the management of the companies.

4CARBON EMISSION AND STAKEHOLDER THEORY
Conceptual Model
Hypotheses
Proxy Measures for Theoretical Constructs
Theoretical
Construct
Proxy measure (From CDP
survey provided)
Dependent (DV) and
Independent (IV).
Control Variable (CV),
Mediating Variable (MeV)
or Moderating Variable
(MoV). In a sentence
explain why it is a DV,
IV, CV, MeV or MoV
Measurement
Scale:
Nominal,
Ordinal, or
Scale (Ratio)
Carbon Emission Percentage change in Scope DV Ratio or

5CARBON EMISSION AND STAKEHOLDER THEORY
1 and 2 emissions for the
reporting year in metric
tonnes CO2e per unit
currency
Scale
Type of Industry Chemical CV Nominal
Providing of
Incentives
Incentives for the
management of climate
change issues, including the
attainment of targets
IV Nominal
Hypothesis
Null Hypothesis: There is no significant differences in the reduction of carbon emission within
the companies that receive or do not receive incentives.
Alternate Hypothesis: There are significant differences in the reduction of carbon emission
within the companies that receive or do not receive incentives.
Research Method
This research is mainly aimed at establishing the connection between the emissions of
CO2 by the chemical industries across the globe with effect to providing incentives to the
companies. A sample of 60 randomly selected companies belonging to the chemical industry has
been selected from the dataset. This is a secondary research as the data is collected from a
secondary source. Appropriate quantitative analysis techniques will be applied to perform the
hypothesis test with the help of the Statistical Tool SPSS.

6CARBON EMISSION AND STAKEHOLDER THEORY

7CARBON EMISSION AND STAKEHOLDER THEORY
References
Ben-Amar, Walid, Millicent Chang, and Philip McIlkenny. "Board gender diversity and
corporate response to sustainability initiatives: Evidence from the carbon disclosure
project." Journal of Business Ethics 142.2 (2017): 369-383.
Chiu, Tzu-Kuan, and Yi-Hsin Wang. "Determinants of social disclosure quality in Taiwan: An
application of stakeholder theory." Journal of business ethics 129.2 (2015): 379-398.
Depoers, Florence, Thomas Jeanjean, and Tiphaine Jérôme. "Voluntary disclosure of greenhouse
gas emissions: Contrasting the carbon disclosure project and corporate reports." Journal of
Business Ethics 134.3 (2016): 445-461.
Hahn, Rüdiger, Daniel Reimsbach, and Frank Schiemann. "Organizations, climate change, and
transparency: Reviewing the literature on carbon disclosure." Organization & Environment 28.1
(2015): 80-102.
Lee, Su‐Yol, and Robert D. Klassen. "Firms’ response to climate change: the interplay of
business uncertainty and organizational capabilities." Business Strategy and the
Environment 25.8 (2016): 577-592.
Lee, Su‐Yol, Yun‐Seon Park, and Robert D. Klassen. "Market responses to firms' voluntary
climate change information disclosure and carbon communication." Corporate Social
Responsibility and Environmental Management 22.1 (2015): 1-12.
Liesen, Andrea, et al. "Does stakeholder pressure influence corporate GHG emissions reporting?
Empirical evidence from Europe." Accounting, Auditing & Accountability Journal 28.7 (2015):
1047-1074.

8CARBON EMISSION AND STAKEHOLDER THEORY
Yunus, Somaiya, Evangeline Elijido-Ten, and Subhash Abhayawansa. "Determinants of carbon
management strategy adoption: Evidence from Australia’s top 200 publicly listed
firms." Managerial Auditing Journal 31.2 (2016): 156-179.