Relationship between climate change and stakeholders

Discuss about the Climate Change its Consequence for the Stakeholder.

Hörisch, Freeman and Schaltegger (2014) stated that disclosure might be effective in a manner to overcome the information asymmetry between distinct participants of the market. In the climate change context decisions were taken by the consumers, investors and owners regarding that determined the success of attaining low carbon economy. In contrast, Mansell (2015) indicated that greenhouse gas information gradually disclosed by the listed companies of the nation is conducted through two distinct channels of communication such as corporate report along with carbon disclosure project. The social and environment performance practice along with carbon disclosure needs resources with respect to expertise and funding (Ben?Amar and McIlkenny 2015).

According to Mitchell et al. (2016) stakeholder theory can be explained as organizational management theory along with voluntary carbon disclosures which deals with maintaining values and morals of managing stakeholders of a company.  These researchers also evidenced that this theory ensures that company’s purpose is to generate stakeholder value. For such reasons, it needs to consider all its suppliers, consumers, shareholders and communities. Moriarty (2014) explained that the stakeholder ecosystem encompass anyone who is impacted by the organization as well as its business workings. Organizations are deemed to make profit in order to satisfy their stakeholders and ensure positive growth (Lee, Park and Klassen 2015).

Figure 1: Stakeholder Theory and Engagement

(Source: Schaltegger and Burritt 2017)

Weiss (2014) indicated that company size, profitability, gearing, financial slack and profitability are the vital regulatory determinants of voluntary carbon disclosure. Weiss (2014) stated that considering these factors the companies are taking into account the effect of climate change within economies that are intending to address through effective corporate carbon emission disclosure. Organizations monitor their carbon emissions over the product life cycle while considering the bottom line and recognizing ways to enhance resources allocation.

The conceptual framework is prepared below in order to address the research question and hypotheses. This conceptual framework focuses on the sustainable carbon disclosure and reporting process that has integrated aspects such as sustainability accounting, reporting and planning (Grauel and Gotthardt 2016). This framework will explain that carbon declaration is an aspect of global efforts in decreasing carbon emissions that encompass considerable investments along with long term commitment (Hörisch, Freeman and Schaltegger 2014). Identification of the important shareholders is necessary in understanding the people those are contributing to the accounting and reporting process along with determining the stakeholder salience. Carbon disclosure reporting needs generation of carbon emissions inventory along with carbon management implementation. The theoretical framework explains various proxies associated with the theories explained in diagram along with their impact on voluntary carbon disclosures. The framework also indicates the determinants for the carbon disclosure within the corporate real estate organizations (Mitchell et al. 2016).

Identification of important shareholders in carbon disclosure

Figure 2: Conceptual Framework of the Research

(Source: Luo and Tang 2014)

The hypotheses those are to be tested after the completion of this research are mentioned below:

H1: There is a positive relationship among voluntary reduction target and stakeholder power

H2: Low powered organizations will be more likely to respond to the pressure of their powerful stakeholders

H3: Suppliers to powerful companies considers adopting challenging emissions targets when their customer declares a commitment to sustainability

The theoretical construct needs proxy measures for research on carbon disclosure and stakeholder theory relationship. This is necessary in explaining the dependent and independent variables for the research (Hörisch, Freeman and Schaltegger 2014).

Theoretical Construct	Proxy measure	Dependent (DV), Independent (IV)	Source
Stakeholder theory research is relied  on the voluntary disclosure	Low powered organizations are more likely to respond to their powerful shareholder pressure	Dependent variable is  voluntary reduction target	The target is disclosed within CDP
Organizations have a moral responsibility to consider the impact that they have on their various stakeholders	Suppliers belonging to the powerful companies are likely to implement challenging emissions target in case its consumers declare sustainability commitment	Independent variable is the power of stakeholders	Data associated with this variable will be attained through analysing the relative size of this industry and power associated with porter’s forces of consumer’s verses suppliers.

Deductive research approach is directly linked with the quantitative data evaluation (Plumlee et al. 2015). This theory is applicable as it is focused on developing hypotheses relied on a present theory. Moreover, a research design is also designed in testing the research hypotheses. As the research will consider quantitative research approach in analyzing the responses gathered from its respondents, deductive research approach will be employed in analyzing that climate change has huge consequences for the stakeholders (Depoers, Jeanjean and Jérôme 2016). This is the cause for which, deductive research approach is taken into account to be the most suitable approach in attaining accurate findings from the study.

The research will use primary and secondary data collection process will be employed in analyzing that climate change has huge consequences for the stakeholders. The quantitative data indicates the section of information that can be analyzed for gathering information in consideration to the research findings (Hörisch, Freeman and Schaltegger 2014). Secondary data will be gathered from reliable journals and government websites. Primary data will be gathered from the questionnaire survey method. For these reason suitable respondents has been selected to take part in the survey process in order to attain appropriate findings on stakeholder theory practice and carbon disclosure theory (Hahn, Reimsbach and Schiemann 2015).

Simple random sampling method offers equal opportunity to the respondents of getting chosen in the survey. This sampling method is used in this research for the reason that it decreases bias from the process of selection and presents representative samples. For conducting the research, this method will be employed for carrying out survey with the professionals (Mitchell et al. 2016). For the research 32 companies will be selected that has its business operation on United Kingdom and the managers and shareholders responses will be gathered and analyzed.

Research hypotheses presented

Highly efficient data analytical and statistical processes will be used for researching the data collected for researching that climate change has huge consequences for stakeholders. This is required to attain suitable and reliable findings from the research. Moreover this also facilitates in sustaining the interpretation and transparency of the gathered data (Qian and Schaltegger 2017). MS Excel will be used for data analysis process. This is highly important in converting the opinion of the respondents into percentage of anticipating the trend of respondent’s viewpoint. These statistical analysis tools are essential in properly planning, designing and collecting data for the research that is helpful in gathering information from the research data. The quantitative information that will be attained will be presented clearly in the form of graphs and tables. This can simplify the process of interpretation of collected data (Giannarakis et al. 2017). This process is highly useful in communicating the research findings in order to support hypotheses along with offering credibility to the research method used.

References

Ben?Amar, W. and McIlkenny, P., 2015. Board effectiveness and the voluntary disclosure of climate change information. Business Strategy and the Environment, 24(8), pp.704-719.

Depoers, F., Jeanjean, T. and Jérôme, T., 2016. Voluntary disclosure of greenhouse gas emissions: Contrasting the carbon disclosure project and corporate reports. Journal of Business Ethics, 134(3), pp.445-461.

Giannarakis, G., Konteos, G., Sariannidis, N. and Chaitidis, G., 2017. The relation between voluntary carbon disclosure and environmental performance: The case of S&P 500. International Journal of Law and Management, 59(6), pp.784-803.

Grauel, J. and Gotthardt, D., 2016. The relevance of national contexts for carbon disclosure decisions of stock-listed companies: a multilevel analysis. Journal of Cleaner Production, 133, pp.1204-1217.

Hahn, R., Reimsbach, D. and Schiemann, F., 2015. Organizations, climate change, and transparency: Reviewing the literature on carbon disclosure. Organization & Environment, 28(1), pp.80-102.

Hörisch, J., Freeman, R. E., and Schaltegger, S. 2014. Applying stakeholder theory in sustainability management: Links, similarities, dissimilarities, and a conceptual framework. Organization & Environment, 27(4), pp. 328-346.

Lee, S.Y., Park, Y.S. and Klassen, R.D., 2015. Market responses to firms’ voluntary climate change information disclosure and carbon communication. Corporate Social Responsibility and Environmental Management, 22(1), pp.1-12.

Luo, L. and Tang, Q., 2014. Does voluntary carbon disclosure reflect underlying carbon performance?. Journal of Contemporary Accounting & Economics, 10(3), pp.191-205.

Mansell, S., 2015. Book Review: Rejoinder to Veldman’s review of Capitalism, Corporations and the Social Contract: A Critique of Stakeholder Theory (Vol. 22, No. 2, pp. 271-275). Sage UK: London, England: Sage Publications.

Mitchell, R.K., Weaver, G.R., Agle, B.R., Bailey, A.D. and Carlson, J., 2016. Stakeholder agency and social welfare: Pluralism and decision making in the multi-objective corporation. Academy of Management Review, 41(2), pp.252-275.

Moriarty, J., 2014. The connection between stakeholder theory and stakeholder democracy: An excavation and defense. Business & Society, 53(6), pp.820-852.

Plumlee, M., Brown, D., Hayes, R.M. and Marshall, R.S., 2015. Voluntary environmental disclosure quality and firm value: Further evidence. Journal of Accounting and Public Policy, 34(4), pp.336-361.

Qian, W. and Schaltegger, S., 2017. Revisiting carbon disclosure and performance: Legitimacy and management views. The British Accounting Review, 49(4), pp.365-379.

Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts and practice. Routledge.

Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.