Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies

Erin Marie Reid () and Michael Toffel
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Erin Marie Reid: Harvard Business School

No 09-019, Harvard Business School Working Papers from Harvard Business School

Abstract: The challenges associated with climate change will require governments, citizens, and firms to work collaboratively to reduce greenhouse gas emissions, a task that requires information on companies' emissions levels, risks, and reduction opportunities. This paper explores the conditions under which firms participate in this endeavor. Building on theories of how social activists inspire changes in organizational norms, beliefs, and practices, we hypothesize that shareholder actions and regulatory threats are likely to prime firms to adopt practices consistent with the aims of a broader social movement. We find empirical evidence of direct and spillover effects. In the domain of private politics, shareholder resolutions filed against it and others in its industry increase a firm's propensity to engage in practices consistent with the aims of the related social movement. Similarly, in the realm of public politics, threats of state regulations targeted at a firm's industry as well as regulations targeted at other industries increase the likelihood that the firm will engage in such practices. These findings extend existing theory by showing that both activist groups and government actors can spur changes in organizational practices, and that challenges mounted against a single firm and an industry can inspire both firm and field-level changes.

Keywords: social movements theory; institutional change theory; private politics; activist shareholder resolutions; climate change; environmental sustainability (search for similar items in EconPapers)
Pages: 46 pages
Date: 2008-08, Revised 2009-06
New Economics Papers: this item is included in nep-cse, nep-env and nep-pol
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Citations: View citations in EconPapers (254)

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Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:09-019

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