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Firms’ Response to Sustainable Climate Change

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A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Air, Climate Change and Sustainability".

Deadline for manuscript submissions: closed (31 May 2019) | Viewed by 68242

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Special Issue Editor

Prof. Dr. Su-Yol Lee

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Guest Editor

College of Business Administration, Chonnam National University, 77 Yongbong-ro, Buk-gu, Gwangju 61186, Republic of Korea
Interests: corporate sustainability; corporate social responsibility; climate change and business strategies; low-carbon economy; sustainable supply chain management; sustainable business

Special Issue Information

Dear Colleagues,

Climate change has emerged as one of the most critical and challenging business concerns. Firms have begun to consider climate change issues as part of their strategic management plans. A number of countries have increased their levels of effort to mitigate global warming. The Paris Agreement has urged firms to take a more proactive and strategic stance toward a sustainable and low-carbon economy. However, our understanding of firms’ managerial responses to sustainable climate change remains at an early stage. Academic researchers and industry practitioners, as well as policy-makers, are increasingly required to address business risks and opportunities engendered by climate change and provide strategic implications for a sustainable climate change era.

This Special Issue will encompass a selection of articles addressing, among others, concerns linked to:

(1) Understand firms’ attitudes, perceptions, and stances to climate change

(2) Explore a diverse range of managerial and strategic options to address climate change issues

(3) Characterize firms’ managerial responses to climate change

(4) Examine antecedents and consequences of firms’ responses to climate change

(5) Investigate the effects of firms’ response to sustainable climate change on economic, environmental, and social performance

(6) Depict business cooperative models with supply chain partners, external stakeholders, and society for transition to sustainable and low-carbon economy, and

(7) Develop appropriate climate change policy design to promote firms’ forward-looking response

Prof. Su-Yol Lee
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

Firms’ response to climate change
Business strategies to a low-carbon and sustainable economy
Corporate carbon management
Climate change policies and business competitiveness
Low-carbon supply chain

Published Papers (11 papers)

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Research

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15 pages, 270 KiB

Open AccessArticle

The Effects of Corporate Green Efforts for Sustainability: An Event Study Approach

by Yonghwi Noh

Sustainability 2019, 11(15), 4073; https://doi.org/10.3390/su11154073 - 28 Jul 2019

Cited by 8 | Viewed by 2907

Abstract

This study investigates the long-term effects of corporate green efforts on the financial performances of the US public firms by using the ISO 14001 certification. Based on the natural resource based view, the rigorous event study was employed using 174 US public firms on NYSE (New York Stock Exchange) and NASDAQ (National Association of Securities Dealers Automated Quotations) to analyze the pre and post abnormal performances of the certification during the 1996–2010 period. The results indicate that ROI and Tobins’s Q showed the immediate positive response after the firms’ applying for the certification, implying that the market accepts the announcement of ISO 14001 as a positive signal. Asset turnover also showed positive abnormal performances for the short and long term. The results imply that the corporate green efforts are beneficial to the firm by improving sales and profitability, while the capital market does not clearly respond to these efforts in the long run. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

16 pages, 565 KiB

Open AccessArticle

Creating Sustainable and Climate Shared Value in Public Institution: Lessons from a Case of Korea Army Cadet Military School

by Hyuck Shin Kwon and Hyun Chae Park

Sustainability 2019, 11(14), 3796; https://doi.org/10.3390/su11143796 - 11 Jul 2019

Cited by 2 | Viewed by 4254

Abstract

The Creating Shared Value (CSV) strategy that companies are adopting to make their own sustainable management possible and solve social problems no longer remains in the business model for corporations alone. Not only state-run companies, but also social enterprises are using CSV strategies as a part of their management strategies to attain social values and achieve remarkable results. However, the majority of CSV studies conducted so far focus on only corporations and their contents are mainly covered to identify the correlation between the independent variables and financial or non-financial performance from a business perspective. In this context, the purpose of the study is to identify how public organizations can enhance their core competitiveness by using CSV strategies. Utilized case-based research and document analysis method, the study analyzes CSV activities carried out spanning the period of 2017-2018 in Korea Army Cadet Military School (KACMS) from the public organization’s point of view. As a result, CSV strategies done by public organizations can improve the performances of unique tasks, improve the level of safety, human rights, and increase job satisfaction and morale. Additionally, the strategies can also improve the sustainability of the region, activate the local economy, and contribute to the conservation and betterment of the local environment. This study presents case-evidence that public organizations, like private companies, may also achieve their intended performance through CSV activities. The study provides guidance to expand the scope and subjects of CSR research theoretically, and may also contribute to exploring new approaches that can lead to co-prosperity among social components, in practice. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

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18 pages, 924 KiB

Open AccessArticle

Incentive Mechanism for Sustainable Improvement in a Supply Chain

by EuiBeom Jeong, GeunWan Park and Seung Ho Yoo

Sustainability 2019, 11(13), 3508; https://doi.org/10.3390/su11133508 - 26 Jun 2019

Cited by 7 | Viewed by 3063

Abstract

In this study, we consider the issue of sustainable development in the supply chain consisting of an original equipment manufacturer (OEM) and a contract manufacturer (CM). We investigate how to facilitate the CM’s investment in the environmental quality of a product so as to properly respond to climate change. We introduce a quantity incentive contract, and obtain the optimal solution based on a Stackelberg game. The OEM, as the focal company, determines the level of the incentive, and the CM, responsible for product design and production, determines its level of environmental quality given the OEM’s incentive offer. To investigate the effectiveness of the quantity incentive contract and provide important implications, we analytically compare the quantity incentive contract with the basic wholesale price contract without any incentives and conduct numerical experiments. Our results reveal that the quantity incentive contract facilitates the CM’s investment in environmental quality, and enhances the environmental, market, and profit performance of not only the CM but also the OEM which pays the incentive. We also show that the quantity incentive contract is suitable to develop a long-term relationship between the OEM and the CM. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

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33 pages, 2184 KiB

Open AccessArticle

The Effects of Corporate Social Responsibility Practices and Environmental Factors through a Moderating Role of Social Media Marketing on Sustainable Performance of Business Firms

by Jaffar Abbas, Shahid Mahmood, Hashim Ali, Muhammad Ali Raza, Ghaffar Ali, Jaffar Aman, Shaher Bano and Mohammad Nurunnabi

Sustainability 2019, 11(12), 3434; https://doi.org/10.3390/su11123434 - 21 Jun 2019

Cited by 134 | Viewed by 21012

Abstract

This precise study performed a focalized investigation to examine the association of environmental effects, new product development performance, superior customers’ value, and corporate social responsibility (CSR) on sustainable performance. This research study aimed to investigate how social media marketing application moderates the association between corporate social responsibility and sustainable performance of the firms located in Multan Division, Pakistan. This study applied a simple random sampling approach to execute this research, and the authors sent a questionnaire with an invitation letter and informed consent form to 752 respondents. Based on 548 valid responses from the targeted population, the first step was to screen and analyze data through Statistical Package for the Social Sciences (SPSS-V25) and the Smart PLS V-3.2.8. The results indicated that corporate social responsibility presented a positive impact on firms’ sustainable performance. The findings also revealed that social media marketing tools moderated the relationship between CSR and sustainable production of business firms. As a final point, the study only included respondents from Multan Division, therefore, limiting the generalizability of the findings to other Pakistani business firms. The implications of this study may provide further directions for researchers and academicians to consider the larger sample size and the addition of new variables in other regions worldwide. The findings are useful for filling the gap between the relationship of environmental effects, CSR, and social media marketing application to calculate the sustainable performance of business firms. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

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28 pages, 1506 KiB

Open AccessArticle

The Impact of Entrepreneurial Business Networks on Firms’ Performance Through a Mediating Role of Dynamic Capabilities

by Jaffar Abbas, Saqlain Raza, Mohammad Nurunnabi, Mohd Sobri Minai and Shaher Bano

Sustainability 2019, 11(11), 3006; https://doi.org/10.3390/su11113006 - 28 May 2019

Cited by 129 | Viewed by 10831

Abstract

This precise study is the first to perform a focalized investigation on the relationship between entrepreneurial business networks and sustainable performance of small firms. The entrepreneurial business network is a multifaceted business network of business firms, working together to achieve business objectives. Business relationships and firm aggregations are the main categories of entrepreneurial business networks, which help small and medium-sized enterprises to become more dynamic, innovative and competitive. The entrepreneurial business network is a networking, which provides a platform to build business relationships, identify, develop or act upon economic opportunities, share information and seek potential business partners for ventures. However, few studies have sought to understand the association of entrepreneurial business network (EBN) and firms’ sustainable performance in the context of Pakistan. This investigation aims to examine the relationship between EBN and small firms’ sustainable performance by applying the Smart PLS-SEM software V-3.2.8. This study explores how dynamic capabilities mediate the relationship between entrepreneurial business network and sustainable performance of small firms. The data received reports on small firms, manufacturing surgical instruments. The findings indicated that the entrepreneurial business network had a significant positive relationship with dynamic capabilities, which in turn presented a positive relation to a sustainable performance of small firms. By developing sustainable EBN, small firms can achieve sustainable performance by implementing dynamic capabilities in a competitive environment. The results affirmed that highly entrepreneurial firms showed a tendency to create a business network for achieving sustainable performance. The results also revealed that firms using business networks and dynamic capabilities efficiently; achieved their sustainable performance. The findings indicated that the study proposed a holistic and systematic model to achieve sustainable performance through firms’ dynamic capabilities. The generalizability of these findings provides useful insight and direction for future studies in Pakistan. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

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20 pages, 2559 KiB

Open AccessArticle

Commitment to Environmental and Climate Change Sustainability under Competition

by Jeong Eun Sim and Bosung Kim

Sustainability 2019, 11(7), 2089; https://doi.org/10.3390/su11072089 - 08 Apr 2019

Cited by 4 | Viewed by 3193

Abstract

This study investigates how the commitment of firms under competition influences environmental sustainability investment, pricing decisions, and profits of firms. We consider a stylized model where two firms compete in the market and examine three scenarios: (1) both firms commit, (2) only a single firm commits, and (3) neither firm commits. Interestingly, we find that commitment to sustainability investment by all firms results in the lowest sustainability investment in the industry. However, when a commitment is only made by one firm, sustainability investment in the industry can be the highest. Compared with under the no commitment scenario, a committed firm obtains a higher profit regardless of whether the commitment is also made by the competitor, but the competitor may become more profitable than the committed firm when it does not make a commitment. Although commitment by all firms yields the largest profits, it is the least effective from the entire societal perspective, resulting in both the lowest social welfare and the lowest sustainability investment. Instead, commitment by a single firm or no commitment can be the most effective for the entire society. We also discuss the implications of the investment efficiency of sustainability and consumer taste preference. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

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16 pages, 669 KiB

Open AccessArticle

Corporate Competitiveness Index of Climate Change: A Balanced Scorecard Approach

by Jae Kyu Myung, Hyoung-Tae An and Su-Yol Lee

Sustainability 2019, 11(5), 1445; https://doi.org/10.3390/su11051445 - 08 Mar 2019

Cited by 8 | Viewed by 7133

Abstract

Climate change is one of the most critical issues in the business sector. This conceptual study proposes a corporate competitiveness evaluation model of climate change by adopting the Balanced Scorecard approach. This study provides a series of specific performance and competitiveness indicators of climate change in the four dimensions of learning and growth, internal process, external stakeholders, and finance and carbon performance. The indicators, which use both quantitative and qualitative methods, can be immediately applied in the field. This study presents practical guidelines to successfully adopt and implement the competitiveness evaluation model in an organization by considering prevalent innovation tools of business process management, process visualization, and knowledge socialization. Finally, it provides some implications for managers and policy-makers who wish to proactively address climate change in the business sector. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

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13 pages, 230 KiB

Open AccessArticle

Cognitive Bias in Emissions Trading

by Jae-Do Song and Young-Hwan Ahn

Sustainability 2019, 11(5), 1365; https://doi.org/10.3390/su11051365 - 05 Mar 2019

Cited by 5 | Viewed by 2758

Abstract

This study investigates whether cognitive biases such as the endowment effect and status quo bias occur in emissions trading. Such cognitive biases can serve as a barrier to trade. This study’s survey-based experiments, which include hypothetical emissions trading scenarios, show that the endowment effect does occur in emissions trading. The status quo bias occurs in only one of the three experiments. This study also investigates whether accumulation of experience can reduce cognitive bias as discovered preference hypothesis expects. The results indicate that practitioners who are supposed to have more experience show no evidence of having less cognitive bias. Contrary to the conventional expectation, the practitioners show significantly higher level of endowment effect than students and only the practitioners show a significant status quo bias. A consignment auction situation, which is used in California’s cap-and-trade program, is also tested; no significant difference between general permission trading and consignment auctions is found. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

12 pages, 226 KiB

Open AccessArticle

The Usefulness of Accounting Information Derived by Applying the Percentage of Completion Method to Enhance Sustainable Business Practices: Evidence from South Korea

by Hyun Mi Ji

Sustainability 2019, 11(1), 7; https://doi.org/10.3390/su11010007 - 20 Dec 2018

Cited by 4 | Viewed by 3284

Abstract

In South Korea, accounting fraud based on the recognition of revenue occurs frequently. The operating profit will be inaccurate if incorrect project completion rates are applied. In order to apply the percentage of completion method (PCM), the project completion rate should be calculated correctly. There has been much controversy regarding the accuracy of the progress rate and the usefulness of the revenue information calculated from the PCM. Therefore, this study investigated whether the quality level of operating profit information using the PCM is actually low in terms of information usefulness. The study period was from 2011 to 2017, the sample was 10,050 firm-year observations among the listed companies in the Korea Stock Exchange, and financial data from the KIS-Value database was used. Empirical analyses showed that investors evaluated the information value of the operating profit by applying the PCM. In other words, there was a low correlation between the stock price and the operating profit when the PCM was used. These results suggest that the practical application of reliable PCM standards and strict supervision by supervisory institutions are necessary. The limitation of this study is that the verification period, i.e., 2011–2017, is short. This is because Korea was obligated to apply the Korean International Financial Reporting Standards (K-IFRS) from 2011. Therefore, in order to ensure comparability of the sample period, only the period after the application of K-IFRS was examined. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

16 pages, 253 KiB

Open AccessArticle

An Analysis of the Effects of Climate Change Policy, Stakeholder Pressure, and Corporate Carbon Management on Carbon Efficiency on the Korean Petrochemical Industry

by Soo-Hyun Lee and Su-Yol Lee

Sustainability 2018, 10(12), 4420; https://doi.org/10.3390/su10124420 - 26 Nov 2018

Cited by 3 | Viewed by 2403

Abstract

Climate change is a challenging issue for government and society as well as in business circles; it has the potential to transform the competitive business environment entirely. This study analyzed the carbon efficiency of petrochemical companies subject to the Target Management System, a Korean carbon policy. The results of data envelopment analysis of 20 Korean petrochemical companies over three years yield some interesting findings. First, companies showed a wide range of carbon efficiency ranging from 0.05 (the least efficient) to 1.00 (the most efficient). Second, because this gap is so wide, the effect of the TMS carbon policy was not apparent. Third, pressure from media and financial investors facilitates carbon efficiency. Fourth, firms’ efforts toward low-carbon product/technology development also improve carbon efficiency. This study provides some implications for managers and policy-makers who wish to foster firms’ competitiveness and reduce greenhouse gas emissions at the same time. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

Other

Jump to: Research

16 pages, 686 KiB

Open AccessHypothesis

The Effect of Safety Management and Sustainable Activities on Sustainable Performance: Focusing on Suppliers

by DonHee Lee

Sustainability 2018, 10(12), 4796; https://doi.org/10.3390/su10124796 - 15 Dec 2018

Cited by 11 | Viewed by 6780

Abstract

This research empirically examines the effect of safety management and sustainable activities on sustainable performance of work safety and workplace environments. The proposed model with developed hypotheses were tested using the data collected from 189 respondents in Korean firms across various industries. The research findings indicate that planning and control systems affect activities of participation and monitoring in supply chain management (SCM) processes, which in turn positively affect sustainable performance. The results of the study present practical implications regarding the relationships among planning and control, participation and monitoring activities, and the performance of work safety and workplace environments. The study also provides new insights and implications regarding firms’ investment strategies for safety management to facilitate sustainable work environments. Activities of participation and monitoring within SCM are especially critical for sustainable safety management and efficient operations. Full article

(This article belongs to the Special Issue Firms’ Response to Sustainable Climate Change)

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