Integration of Carbon Risks and Opportunities in Enterprise Risk Management Systems: Evidence from Australian Firms

Journal of Cleaner Production, Vol. 96, pp. 407-417, Forthcoming

Posted: 21 Apr 2015

See all articles by Nava Subramaniam

Nava Subramaniam

Deakin University

Dina Wahyuni

Swinburne University of Technology

Barry Cooper

Deakin University - Faculty of Business and Law

Philomena Leung

Macquarie University; Macquarie University, Macquarie Business School

Graeme Wines

Deakin University

Date Written: April 20, 2015

Abstract

This study addresses managerial perceptions of risks and opportunities related to carbon pricing and emission management, and the factors that affect the extent to which carbon-related risks and opportunities are integrated into the organisation's formal enterprise risk management (ERM) system. We assess the role played by internal governance features, resource availability, managerial perceptions on competitive pressures, and industry type on the inclusion of carbon risks within the ERM system. Based on survey responses from 96 senior managers in Australian carbon intensive firms (i.e. firms listed in the 2009 Publication of Data under Section 24 of the National Greenhouse and Energy Reporting (NGER) Act 2007), we find that the extent of carbon risk integration is positively associated with the existence of a formal carbon strategy, senior management involvement, internal audit oversight, resource (personnel and funds) availability and energy sector membership. The paper also provides several insights into the perceptions of risks and opportunities confronting an organisation as a result of carbon pricing mechanism.

Suggested Citation

Subramaniam, Nava and Wahyuni, Dina and Cooper, Barry and Leung, Philomena and Wines, Graeme, Integration of Carbon Risks and Opportunities in Enterprise Risk Management Systems: Evidence from Australian Firms (April 20, 2015). Journal of Cleaner Production, Vol. 96, pp. 407-417, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2596705

Nava Subramaniam

Deakin University ( email )

Melbourne Campus at Burwood
221 Burwood Highway
Victoria 3125, Victoria
Australia

Dina Wahyuni (Contact Author)

Swinburne University of Technology ( email )

PO Box 218
Hawthorn, VIC 3122
Australia

Barry Cooper

Deakin University - Faculty of Business and Law ( email )

Burwood, Victoria 3215
Australia

Philomena Leung

Macquarie University ( email )

North Ryde
Sydney, New South Wales 2109
Australia

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Graeme Wines

Deakin University ( email )

75 Pigdons Road
Victoria, Victoria 3216
Australia

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