Determinants and Characteristics of Korean Companies’ Carbon Management under the Carbon Pricing Scheme

Abstract

Abstract:In response to the domestic emission trading scheme, Korean companies are required to shift their strategies from voluntary or regulation-driven management approaches to innovative carbon management utilizing their carbon option linked with economic value. Using a questionnaire survey targeting companies subjected to the emission trading scheme, this study explores the status of Korean companies' carbon management in a series of five strategies and identifies the correlation between companies' proactive carbon strategies and pre-listed determinant factors. This study found that Korean companies' practices in accordance with carbon pricing deviate little from conventional energy and environmental management in this phase. They are likely to be affected by the need to appear socially responsible or to make a social contribution, without having to exceed this mandate in terms activities outside of this remit. Yet, only a small proportion of companies have advanced to the stage of proactive carbon management. For them, top managers' support and understanding are essential factors together with government pressure to factor-in issues related to carbon with their business strategies. This study provides implications for policy and corporate in promoting carbon-oriented management under the carbon policy.

Carbon Accounting Measurement with Digital Non-Financial Corporate Reporting and a Comparison to European Automotive Companies Statements

“…With a comprehensive approach to understanding its role in business models, Suk distinguished 5 stages of carbon management [2]. Stage 1, the passive strategy, is the basic level at which companies may recognise or become aware of the need for energy management, which is limited to energy conservation and management.…”

“…Micek et al analysed the market opportunities and regional competitiveness of automotive firms [42] assuming the aim of German development of Central European automotive manufacturers being to mostly acquire better political and organisational capabilities, which implies the lack of integration of sustainability in business models regarding regional development. In summary, based on the underlying principle of the RBV theory concerning the allocation of resources, carbon accounting, including the release of regular reports on emission data [2] among other factors influence corporate competitiveness. Based on the literature, the RBV theory can be used to distinguish between companies in terms of their level of carbon management.…”

“…Industrial companies use large amounts of energy and materials in their activities and are therefore particularly responsible for greenhouse gas emissions. On the other hand, their technological innovation potential makes them major players in the climate change challenge [2]. According to the recent study of Spreafico, the environmental impact of cars makes up the largest share of the total global impact of passenger transport, due to their ubiquity and high impact per kilometre travelled [3].…”

“…To reduce the environmental impact of the car industry, many governments have introduced significant mitigation measures. As a result, all car manufacturers have embarked on wide-ranging interventions to increase sustainability [2]. The pursuit of sustainable development leads companies to react in different ways.…”

“…A key feature of proactive environmental strategies is the use of modern methods integrated into management systems [4]. Companies should integrate their sustainability goals across the business platform, rather than treating them as separate from their business strategy [2]. Carbon accounting issues need to be integrated into functional areas to support the achievement of corporate and climate policy objectives [1].…”