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Set & Done? Trade‐offs between Stakeholder Expectation and Attainment Pressures in Corporate Carbon Target Management

Patrick J. Callery and Eun‐Hee Kim

Journal of Management Studies, 2025, vol. 62, issue 7, 2770-2804

Abstract: Investors increasingly pressure firms for action on climate change and carbon emissions, in particular, by setting carbon targets. Whereas investors largely rely on quantitative information in evaluating this important aspect of non‐financial performance, scarce research has explored how firms may exploit the numerical magnitudes of carbon targets. We examine this possibility by analysing deceptive parameter changes in carbon targets after initial adoption, wherein firms create the perception of strengthening carbon targets while in reality loosening them, a novel form of decoupling. We theorize a U‐shaped relationship between the most conspicuous target parameter, target size (percentage emissions reduction), and the propensity for deceptive target change based on countervailing pressures – stakeholder expectation management and target attainment – that create tension. We further propose greater investor pressure over policy, through long‐term ownership and shareholder voice, exacerbates these pressures whereas media controversy that may prompt investor scrutiny over practice deters deceptive target changes. We find empirical support for our hypotheses and provide additional analyses that support our theorized latent, countervailing pressures and our characterization of deceptive change as decoupling.

Date: 2025
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https://doi.org/10.1111/joms.13140

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