Context-Based Sustainability and Corporate CO2 Reduction Targets: Are Companies Moving Fast Enough?
International Review of Accounting, Banking, and Finance, Fall/Winter 2013, Vol. 5 (3/4), 87-104
18 Pages Posted: 18 Apr 2014
Date Written: April 16, 2014
Corporate sustainability activities are often ad hoc; that is, the extent to which a company moves toward being more sustainable is based on organizational feasibility or economic acceptance rather than true sustainability criteria. This paper examines corporate climate and carbon policy through the lens of context-based sustainability (CBS). CBS argues that true sustainable efforts must consider the ecological capacity of the environment and the fair allocation of this capacity. Only by doing so will the result be an outcome of a livable and sustainable world. The paper combines aspects of physical science (atmospheric CO2 carrying capacity) and philosophy (inter-generational equity and resource allocation) with corporate policy. When applied to climate change this implies examining corporate efforts relative to climate stabilization paths and further examining what a fair allocation of future emissions would be. We look at the documented carbon reductions for a sample of large US corporations including EPA Climate Leadership Award Winners in 2012 and a larger sample of companies from the same industries and compare their carbon reductions to several allocations of the global carbon budget required to limit climate change to just 1°C or 2°C. We find that the emissions path of these US corporations only satisfies the most generous, business-as-usual allocation of carbon emissions.
Keywords: Environmental Economics, Corporate Social Responsibility, Sustainability Accounting
JEL Classification: Q50, M14, G30
Suggested Citation: Suggested Citation