Climate Change Denial and Corporate Environmental Responsibility

Journal of Business Ethics, Forthcoming

63 Pages Posted: 25 Apr 2023 Last revised: 19 Jan 2024

See all articles by Mansoor Afzali

Mansoor Afzali

Hanken School of Economics

Gonul Colak

University of Sussex ; Hanken School of Economics

Sami Vähämaa

University of Vaasa

Date Written: November 21, 2023

Abstract

This paper examines whether corporate environmental responsibility is influenced by regional differences in climate change denial. While there is an overwhelming consensus among scientists that climate change is happening, recent surveys still indicate widespread climate change denial across societies. Given that corporate activity causing climate change is fundamentally rooted in individual beliefs and societal institutions, we examine whether local perceptions about climate change matter for firms’ engagement in environmental responsibility. We use climate change perception surveys conducted in the U.S. to compute a novel measure of climate change denial for each U.S. county. We find that firms located in counties with higher levels of climate change denial have weaker environmental performance ratings, are more likely to commit environmental violations, and impose greater environmental costs on society. Regional differences in religiosity, social capital, political leaning, or county-level demographic characteristics cannot explain these results. Furthermore, we document that strong corporate governance mechanisms and corporate culture moderate the negative relationship between climate change denial and corporate environmental responsibility. Overall, our findings offer new insights into how local beliefs and perceptions about climate change may influence firm-level sustainability practices.

Keywords: Climate change, climate change denial, environmental responsibility, corporate social responsibility, sustainability

JEL Classification: G30, G39, M14, Q01, Q54, D22

Suggested Citation

Afzali, Mansoor and Colak, Gonul and Vähämaa, Sami, Climate Change Denial and Corporate Environmental Responsibility (November 21, 2023). Journal of Business Ethics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4424444 or http://dx.doi.org/10.2139/ssrn.4424444

Mansoor Afzali

Hanken School of Economics ( email )

FI-00101 Helsinki
Finland

Gonul Colak

University of Sussex ( email )

Jubilee Building
Falmer
Brighton, BN1 9SN
United Kingdom

Hanken School of Economics ( email )

P.O. Box 479
Arkadiankatu 22
FI-00100 Helsinki, 00100
Finland

Sami Vähämaa (Contact Author)

University of Vaasa ( email )

P.O. Box 700
Vaasa, FI-65101
Finland
+358 29 449 8455 (Phone)

HOME PAGE: http://www.uwasa.fi/~sami

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
304
Abstract Views
1,364
Rank
188,081
PlumX Metrics