The influence of managers' awareness of climate change, perceived climate risk exposure and risk tolerance on the adoption of corporate responses to climate change

Niccolò Maria Todaro, Francesco Testa, Tiberio Daddi and Fabio Iraldo

Business Strategy and the Environment, 2021, vol. 30, issue 2, 1232-1248

Abstract: Uncertainties posed by climate change limit companies' ability to understand implications of global warming on business and society at large, hampering the adoption of tangible organizational responses to climate change. Understanding climate action thus requires to investigate influential factors of decision‐making under uncertainty, which implies acknowledging managerial interpretations and perceptions about climate issues. Drawing insights from the literature on climate inaction and from corporate sustainability literature, the present study examines awareness of climate change and perceived exposure to climate risks as antecedents of corporate responses to climate change, drawing on a survey of managers of Italian manufacturing companies. In addition, the study tests the moderation of risk tolerance on the relation between perceived climate risk exposure and climate action, suggesting that risk attitudes are a significant factor of decision‐making under climate uncertainty. The results support the hypothesis of the model and thus provide several contributions to the literature on business and climate change. Managerial implications and avenues for future research are also discussed.

Date: 2021
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