Measuring the level of corporate commitment regarding climate change strategies

Purpose - This study aims to examine the various climate change practices adopted by firms and develop a set of corporate indexes that measure the level of climate change corporate commitment, climate change risk management integration and climate change strategies adoption. Moreover, this study examines the relationship between the aforementioned indexes. The authors claim that there is a positive relationship between the adoption of climate change strategies, corporate commitment and risk management integration. The aforementioned indexes have been used to assess the largest companies in the oil and gas sectors. Design/methodology/approach - To assess this study's sample companies, a content analysis of their carbon disclosure project (CDP) reports for the years 2012-2015 was conducted. Finally, weights were assigned to the content analysis data based on the results of a survey regarding the difficulty of implementing each climate change practice included in the respective index. The survey sample included climate change experts who are either currently employed in companies that are included in the Financial Times Global 500 (FT 500) list, or work as external partners with these companies. Findings - The present study results highlight the need for developing elaborate corporate indexes, as the various climate change practices have different degrees of difficulty regarding their implementation. Additionally, a general trend in adopting climate change strategies is observed, especially in the field of carbon reduction strategies, which mainly involve the implementation of low carbon technologies. Finally, a positive and significant relationship was found between carbon reduction targets, risk management integration and climate change strategies. Practical implications - Although international research has extensively examined the importance of managers' perceptions on environmental issues as an enabling factor in developing environmental strategies, according to the results of our survey, corporations must go beyond top management commitment towards climate change to be able to successfully implement climate change strategies. Incorporation of climate change risk management procedures into a company's core business activities as well as the establishment of precise carbon reduction targets can provide the basis on which successful climate change strategies are implemented. Originality/value - Most studies address the issue of climate change management in terms of environmental or sustainability management. Furthermore, research on climate change and its relationship with business management is mainly theoretical, and climate change corporate performance is measured with aggregate indexes. This study focuses on climate change which is examined from a five-dimensional perspective: top management commitment, carbon reduction targets, risk management integration, carbon reduction and carbon compensation strategies. This allows us to conduct an in-depth analysis of the various climate change practices of firms.