How do firms’ climate-related management and strategy affect climate change risks and opportunities awareness?
Climate change is an international environmental issue that has increasingly attracted business attention in the past decade because of its actual or potential strategic impact on many companies. This study aims to examine how risk and opportunity awareness is correlated with corporate management and strategy. This study obtains firm data from a questionnaire survey of CDP in 2013, and the data includes 899 observations for risk awareness and 827 observations for opportunity awareness in 64 countries and 20 industry groups. Using the data, this study empirically examines how firms’ management and strategy affect risk and opportunity awareness related to climate change in the regression analysis. By regression analysis, we find some types of corporate climate-related governances and strategies are related to risk and opportunity awareness. The regression result also shows that there seems to be few differences between the effectiveness of firms’ climate-related management on their business risk and opportunity awareness related to climate change. Corporate strategies such as setting emissions reduction targets, launching emissions reduction initiatives, participating emissions trading schemes, and originating/purchasing carbon credits are proved found to be beneficial for increasing the corporate risk and opportunity awareness
Mahammod Tazul Islam