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

46 Pages Posted: 20 Aug 2008 Last revised: 13 Jul 2009

See all articles by Erin Marie Reid

Erin Marie Reid

Harvard University - Business School (HBS)

Michael W. Toffel

Harvard Business School

Date Written: June 16, 2009

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

Suggested Citation

Reid, Erin Marie and Toffel, Michael W., Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies (June 16, 2009). Harvard Business School Technology & Operations Mgt. Unit Research Paper No. 09-019, Available at SSRN: https://ssrn.com/abstract=1237982 or http://dx.doi.org/10.2139/ssrn.1237982

Erin Marie Reid

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Michael W. Toffel (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States
617.384.8043 (Phone)

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