Climate Change Denial and Corporate Environmental Responsibility

Mansoor Afzali (), Gonul Colak () and Sami Vähämaa ()
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Mansoor Afzali: Hanken School of Economics
Gonul Colak: University of Sussex Business School, University of Sussex
Sami Vähämaa: University of Vaasa

Journal of Business Ethics, 2025, vol. 196, issue 1, No 4, 59 pages

Abstract: Abstract This paper examines whether corporate environmental responsibility is influenced by regional differences in climate change denial. While there is an overwhelming consensus among scientists that climate change is happening, recent surveys still indicate widespread climate change denial across societies. Given that corporate activity causing climate change is fundamentally rooted in individual beliefs and societal institutions, we examine whether local perceptions about climate change matter for firms’ engagement in environmental responsibility. We use climate change perception surveys conducted in the U.S. to compute a novel measure of climate change denial for each U.S. county. We find that firms located in counties with higher levels of climate change denial have weaker environmental performance ratings, are more likely to commit environmental violations, and impose greater environmental costs on society. Regional differences in religiosity, social capital, political leaning, or county-level demographic characteristics cannot explain these results. Furthermore, we document that strong corporate governance mechanisms and corporate culture moderate the negative relationship between climate change denial and corporate environmental responsibility. Overall, our findings offer new insights into how local beliefs and perceptions about climate change may influence firm-level sustainability practices.

Keywords: Climate change; Climate change denial; Environmental responsibility; Corporate social responsibility; Sustainability (search for similar items in EconPapers)
JEL-codes: D22 G30 G39 M14 Q01 Q54 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10551-024-05625-y

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