Our tidbits this week consider the effectiveness of the efforts companies are making to adapt to today’s environmental challenges.
Is business adapting to climate change impacts appropriately?
Adaptation to climate change impacts is a key research topic in business ethics that poses substantial implications on the good lives of human beings. The commercial port sector is a highly relevant study focus with its pivotal roles in supply chains and international trade. Hence, it is important to investigate whether the port planning system and practice is appropriate in tackling climate change impacts.
But beforehand, the authors must thoroughly understand the attitude and behaviours of port planners and operators on ports’ climate adaptation planning. Through a survey towards 21 ports (seaports and dry ports) in Canada, the paper investigates the attitude and behaviours of port planners and operators on ports’ climate adaptation planning.
The authors propose a new approach so as to enable port stakeholders to carry out climate adaptation planning effectively. The paper offers important insight to researchers to investigate the ways in developing effective climate adaptation plans and practice for ports and other business sectors.
Adolf K. Y. Ng, Tianni Wang, Zaili Yang, Kevin X. Li and Changmin Jiang. 2018. How is Business Adapting to Climate Change Impacts Appropriately? Insight from the Commercial Port Sector.
Journal of Business Ethics, 150(4), 1029–1047.
The effect of environmental corporate social responsibility on environmental performance and business competitiveness
With the emergence of environmental sustainability and green business management, increasing demands have been made on businesses in the areas of environmental corporate social responsibility (ECSR). Furthermore, the influence of ECSR on green capital investment, environmental performance, and business competitiveness has also been the subject of attention from enterprises.
However, in previous studies, the mediating role of green information technology (IT) capital in the relationship between ECSR, environmental performance, and business competitiveness, has not been investigated by researchers. In order to bridge this gap in the ECSR literature, this study aims to examine the influence of ECSR on green IT capital, and the consequent effect of green IT capital on environmental performance and business competitiveness.
Data were collected from 358 companies from the top 1000 manufacturers in Taiwan. The results confirmed that ECSR has significant positive effects on green IT human capital, green IT structural capital, and green IT relational capital. Green IT structural capital and green IT relational capital have positive effects on environmental performance and business competitiveness, and environmental performance has a positive effect on business competitiveness. In addition, green IT structural capital and green IT relational capital have partial mediating effects on ECSR, environmental performance, and business competitiveness. The implications and suggestions for future research are discussed.
Shun-Pin Chuang and Sun-Jen Huang. 2018. The Effect of Environmental Corporate Social Responsibility on Environmental Performance and Business Competitiveness: The Mediation of Green Information Technology Capital.
Journal of Business Ethics, 150(4), 991–1009.
Environmental legitimacy, green innovation, and corporate carbon disclosure in China
Firms worldwide are increasingly required to disclose (and make efforts to reduce) their carbon emissions due to the environmental damage associated with climate change. Because there has been no previous literature focusing on the determinants of corporate carbon disclosure integrating environmental legitimacy and green innovation, the present study attempted to develop an original framework to fill the research gap.
This study explored the influence of environmental legitimacy (an external informal mechanism) on corporate carbon disclosure, and investigated the role of green innovation (an internal formal mechanism) as a mediator. With the samples of Carbon Disclosure Project (CDP) in China from 2008 to 2012, the results demonstrate that environmental legitimacy significantly negatively influences the likelihood of corporate carbon disclosure, and that green process innovation mediates the relationship, while green product innovation has no significant mediating effect.
It means that environmental legitimacy not only directly affects the likelihood of corporate carbon disclosure, but also indirectly affects it via green process innovation. Hence, companies must increase both informal and formal mechanisms, i.e., external environmental legitimacy and internal green process innovation, to engage in carbon information disclosure and ensure sustainability.
Dayuan Li, Min Huang, Shenggang Ren, Xiaohong Chen and Lutao Ning. 2018. Environmental Legitimacy, Green Innovation, and Corporate Carbon Disclosure: Evidence from CDP China 100.
Journal of Business Ethics, 150(4), 1089–1104.
Carbon risk, carbon risk awareness and the cost of debt financing
The authors seek insights into potential benefits for firms adopting strategies to improve business sustainability in a carbon-constrained future. The authors investigate whether lenders incorporate a firm’s exposure to carbon-related risk into lending decisions through the cost of financing, and if so, importantly whether firms can mitigate the penalty by demonstrating an awareness of their carbon risks.
The authors use a sample of 255 firm-year observations from eight industries over the period 2009–2013. The authors measure carbon-related risk exposure as the firm’s historical carbon emissions and their primary measure of carbon risk awareness is based on the firm’s willingness to respond to the Carbon Disclosure Project (CDP) survey. The authors document a positive association between cost of debt and carbon risk for firms failing to respond to the CDP. Further, this association is economically meaningful, with a one standard deviation increase in carbon risk mapping into between a 38 and 62 basis point increase in the cost of debt.
Equally, the authors find that this penalty is effectively negated for firms exhibiting carbon risk awareness. The results are robust when the authors consider alternate measures of carbon awareness—disclosure through alternative medium to the CDP and firms’ annual cash investment in new capital assets using “cleaner” technology.
The results highlight not only the importance of carbon awareness as a business strategy for polluting firms, but also its importance to lenders exposed to their clients’ default and reputational risk. The debt market appears to incorporate historical carbon emissions and forward-looking indicators of carbon performance.
Juhyun Jung, Kathleen Herbohn and Peter Clarkson. 2018. Carbon Risk, Carbon Risk Awareness and the Cost of Debt Financing.
Journal of Business Ethics, 150(4), 1151–1171.
Environmental reporting through an ethical looking glass
This paper adopts the lens of environmental ethics to explore whether there is a disparity between the ethical approaches of a company in comparison to those expressed by stakeholders in relation to environmental issues, specifically those communicated through the corporate environmental report.
Discourse analysis is adopted to explore the environmental section of the sustainability reports of the case study company as compared to the responses of a sample of the company’s stakeholders, using the lens of three branches of environmental ethics: utilitarianism, deontology and virtue ethics.
Results indicate that the ethical approaches expressed in the case study company’s environmental reports were grounded in utilitarianism and deontology, in contrast to a virtue ethics approach expressed by external stakeholders. The disparity widened as the relationship between the company and the stakeholder became less direct.
This disparity signals a failure to meet one of the primary purposes for preparing sustainability reports: to engage with stakeholders. As such this research contributes to the literature by identifying a disparity in the how this information is communicated compared with how it is perceived by stakeholders. This has important implications for the success of current stakeholder engagement practices.
Leanne Morrison, Trevor Wilmshurst and Sonia Shimeld. 2018. Environmental Reporting Through an Ethical Looking Glass.
Journal of Business Ethics, 150(4), 903–918.
Koranic ethics for environmental responsibility in business practice
Despite the growing interest in examining the role of religious beliefs as a guide towards environmental conscious actions, there is still a lack of research informed by an analysis of divine messages. This deficiency includes the extent to which ethics for environmental responsibility are promoted within textual divine messages; types of environmental themes promoted within the text of divine messages; and implications of such religious environmental ethics for business practice.
The present study attempts to fill this gap by conducting a thorough content analysis of environmental themes within the divine message of Muslims (the Qur’an) focusing on their related ethical aspects and business implications. The analysis has revealed 675 verses in 84 chapters throughout all 30 parts of the Qur’an, with environmental content relating to the core components of the natural world, i.e. human beings, water, air, land, plants, animals, and other natural resources.
This environmental content and its related ethics are grounded on the belief that humans are vicegerents of God on the earth and their behaviours and actions are motivated by earthly and heavenly rewards. Implications of these findings for different sectors/businesses are also highlighted.
Akrum Helfaya, Amr Kotb and Rasha Hanafi. 2018. Qur’anic Ethics for Environmental Responsibility: Implications for Business Practice.
Journal of Business Ethics, 150(4), 1105–1128.