Impact Of Climate Change On Stakeholders: Essay On Carbon Disclosure And Corporate Sustainability.

Determinants of social disclosure quality in Taiwan: An application of stakeholder theory

Question:

Discuss about the Climate Change and its Consequences for Stakeholders.

Carbon or Voluntary Disclosure by Companies

Chiuand Wang (2015) indicated that CDP works for decreasing greenhouse gas emissions of the companies with reducing the risk of climate change. These researchers also indicated that in the year 2015, 822 investors have more than US$95 trillion within assets backed CDP’s climate change information request. Guenther et al. (2016) had a different opinion regarding greenhouse gas information gradually disclosed by the organizations of the country that is listed. This is also carried out by means of two different communication channels like corporate report and the project of carbon disclosure. From the stakeholder theory perspective, it is indicated that the greenhouse gas amounts are gradually decreased within the corporate reports within the CDP (Hartmann, Perego and Young 2013).

Stakeholder Theory

According to Lee, Park and Klassen (2015) stakeholder theory is indicated as an organizational management theory as well as voluntary carbon disclosures that is associated with maintaining morals and values of managing all the company’s stakeholders. These researchers also indicated that this theory makes sure that an organization’s intention is to develop stakeholders’ value (Lovell 2010). Due to these causes, a company must take into account its consumers, suppliers, communities and shareholders. In accordance, Jaggi et al. (2017) stated that stakeholder engagement is a two-way theory of communication which focuses on maintaining information exchange concerning the issues related with domestic sustainability. It is understood to be a dialogue which supports the council in deciding the choices that will be acceptable to the local community.

Figure 1: Stakeholder Theory

(Source: Liesen et al.2015)

Carbon Disclosure Determinants within Corporate Real Estate Companies

Yunus, Elijido-Ten and Abhayawansa (2016) stated that financial market aspect pressure, social pressures, institutional along with economic pressure are important CDP determinants in the corporate real estate organizations. In contrast, Li et al. (2016) indicated that taking into account these aspects the organizations are explaining the climate change effect in the economies which has an intention to deal with efficient disclosure of corporate carbon emission.

The conceptual framework is developed below in order to answer the research hypotheses and question. It also centers on sustainable reporting process and carbon disclosure which has integrated factors of reporting, planning and sustainability accounting (Kalu, Buang and Aliagha 2016). The strategy of integrated reporting as well as sustainability accounting considers a comprehensive analysis of the engagement extent and nature within every phrase of accounting and reporting process. Recognition of vital shareholders is important in order to understand the individuals that are contributing to reporting and accounting process as well as determining salience of stakeholders (Clarkson et al. 2015). The conceptual framework elaborates numerous proxies related with theories indicated in the figure below as well as their effect on voluntary carbon disclosure. The framework also signifies the carbon disclosures in the corporate real estate companies. The theoretical framework will explain the relationship between the independent and dependent variable such as target of voluntary minimization and stakeholder power. Implementation of emission reduction targets are highly associated with carbon disclosure and greatly impacts stakeholder interaction in consideration to asymmetric and imperfect information.

The valuation relevance of greenhouse gas emissions under the European Union carbon emissions trading scheme

Figure 2: Conceptual Framework of the Research

(Source: Smith, Morreale and Mariani 2018)

The hypotheses those are meant to be tested through accomplishment of this research is explained under:

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

H2: Low powered organizations are deemed to respond properly to pressure of the powerful stakeholders

H3: Suppliers of powerful organizationstake into accountadoption ofchallenging emissions targets at the time their customer declares a sustainability commitment

Research Approach:

Since the researcher will take into quantitative research approach to evaluate the responses accumulated from the respondents. The positive research approach will be deployed in evaluating that climate change has large effects on the stakeholders of the corporate organisations (Taylor, Bogdan and DeVault 2015). Along with this, there is direct association between the analysis of quantitative data and positivism research philosophy. The data accumulated will be assessed through the previous trends and current models coupled with the established facts (Mackey and Gass 2015). Thus is the main reason due to which deductive research approach is considered as the most effective approach to accomplish rightful findings from the research.

Data Collection Technique:

In order to assess the effects of climate change on the stakeholders, there will be employment of primary as well as secondary data (Lewis 2015). The quantitative data denotes the segment of information, which could be assessed to accumulate information in relation to the research findings. It is taken into consideration greater amount of data and size of sample for its evaluation. Due to this reason, appropriate respondents will be chosen to participate in the process of survey for achieving suitable findings related to practice of stakeholder theory along with dealing with the issues of accounting (Flick 2015).

Sampling and Sample Size:

In order to carry out with the research, the method of simple random sampling will be used for surveying the corporate professionals. This method is selected primarily because it provides equivalent opportunities to the participants of being selected in the process of survey (Vaioleti 2016). For this specific research, 42 organisations will be chosen carrying out its business operations in UK to interview their shareholders and managers along with assessment of their responses.

Data Analysis Technique:

The data accumulated for this specific research to assess the effects of climate change on the stakeholders of the corporate organisations will necessitate the use of greatly effective data analysis along with statistical techniques. This is needed for accomplishing appropriate and reliable findings from this specific research. Along with this, it enables to sustain the analysis and reliability of the accumulated data (Silverman 2016). Graphs and tables will be used for representing the quantitative information collected from the corporate professionals. As a result, it will become easier to interpret the accumulated data in an effective fashion (Wegener et al. 2013). Tools like Microsoft Excel will be utilised to assess the collected data. This will be beneficial for transferring the participants’ opinion into percent form, which would help in estimating the overall viewpoint of the participants (Brinkmann 2014).

References:

Brinkmann, S., 2014. Interview. In Encyclopedia of critical psychology (pp. 1008-1010). Springer New York.

Chiu, T.K. and Wang, Y.H., 2015. Determinants of social disclosure quality in Taiwan: An application of stakeholder theory. Journal of business ethics, 129(2), pp.379-398.

Clarkson, P.M., Li, Y., Pinnuck, M. and Richardson, G.D., 2015. The valuation relevance of greenhouse gas emissions under the European Union carbon emissions trading scheme. European Accounting Review, 24(3), pp.551-580.

Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research project. Sage.

Guenther, E., Guenther, T., Schiemann, F. and Weber, G., 2016. Stakeholder relevance for reporting: explanatory factors of carbon disclosure. Business & Society, 55(3), pp.361-397.

Hartmann, F., Perego, P. and Young, A., 2013. Carbon accounting: Challenges for research in management control and performance measurement. Abacus, 49(4), pp.539-563.

Jaggi, B., Allini, A., Macchioni, R. and Zagaria, C., 2017. The factors motivating voluntary disclosure of carbon information: Evidence based on Italian listed companies. Organization & Environment, p.1086026617705282.

Kalu, J.U., Buang, A. and Aliagha, G.U., 2016. Determinants of voluntary carbon disclosure in the corporate real estate sector of Malaysia. Journal of environmental management, 182, pp.519-524.

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.

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Li, D., Huang, M., Ren, S., Chen, X. and Ning, L., 2016. Environmental legitimacy, green innovation, and corporate carbon disclosure: Evidence from CDP China 100. Journal of Business Ethics, pp.1-16.

Liesen, A., Hoepner, A.G., Patten, D.M. and Figge, F., 2015. Does stakeholder pressure influence corporate GHG emissions reporting? Empirical evidence from Europe. Accounting, Auditing & Accountability Journal, 28(7), pp.1047-1074.

Lovell, H.C., 2010. Governing the carbon offset market. Wiley interdisciplinary reviews: climate change, 1(3), pp.353-362.

Mackey, A. and Gass, S.M., 2015. Second language research: Methodology and design. Routledge.

Silverman, D. ed., 2016. Qualitative research. Sage.

Smith, J.A., Morreale, M. and Mariani, M.E., 2018. Climate change disclosure: Moving towards a brave new world. Capital markets law journal, 3(4), pp.469-485.

Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.

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Wegener, M., Elayan, F.A., Felton, S. and Li, J., 2013. Factors influencing corporate environmental disclosures. Accounting Perspectives, 12(1), pp.53-73.

Yunus, S., Elijido-Ten, E. and Abhayawansa, S., 2016. Determinants of carbon management strategy adoption: Evidence from Australia’s top 200 publicly listed firms. Managerial Auditing Journal, 31(2), pp.156-179