The Policy Role of Corporate Carbon Management: Co‐regulating Ecological Effectiveness

Abstract

The United Nations Intergovernmental Panel on Climate Change (IPCC) has called for private sector participation in global carbon governance and corporations now seem to be heeding the call at an unprecedented scale. Both critics and proponents of corporate social responsibility (CSR) interpret this as a necessary but uncertain development. Business response has demonstrably failed in the past. Contributing to the CSR and private environmental governance effectiveness literature, this article argues that while voluntary corporate climate governance efforts are essential and improving, they are far from sufficient for meaningful decarbonization. Through an evaluation of the three main underlying corporate carbon management practices (target setting, carbon pricing and carbon reporting), the article highlights how company efforts create business advantage (e.g. risk management) but fall short on ecological effectiveness (i.e. absolute carbon reduction). In response, the paper argues the importance of greater climate policy co‐regulation. This includes indirect enabling by governments and the IPCC to encourage incremental improvements in company efforts. It also includes more direct, state‐led prescriptive interventions coordinated across supply chains and supported by international organizations, to ensure corporate participation and deeper transformative change to business models, industry structures and consumptive patterns at the root of the global climate crisis.

Polycentric urban climate governance: Creating synergies between integrative and interactive governance in Oslo

“…(Private consultant)Overall, regarding the role of the private sector in Oslo in climate action and trans‐local networks, our interviews suggest that the business sector holds considerable promise as collaborative partner and for performing climate change self‐governance. This is in line with what other authors find in other global cities (Lister, 2018), even if there are also limits to their potentials. The business rationale of private firms across the city of Oslo, many among which are part of the trans‐local Business for Climate Network (BCN; 150 firms) and Green Building Alliance (200 firms) and other networks and arenas, underpin shared climate mitigation schemes.…”

Transnational corporations and the challenge of biosphere stewardship

“…More generally, there exists a high level of scepticism towards businesses as sustainability leaders given two decades of relative ineffectiveness of voluntary corporate social responsibility 25,46 . Market concentration and corporate power are often regarded as roadblocks to social progress given the business priority of economic profit over non-market values 24 .…”

“…Voluntary TNC sustainability commitments are essential and can translate into improvements 19 , but so far many private-sector supply chain initiatives for sustainability fall short on several fronts [20][21][22][23] . Overall, the last two decades of efforts to leverage supply chain power of major TNCs have failed to meet the expectations for improved sustainability 24,25 .…”

Where Does CSR Come from and Where Does It Go? A Review of the State of the Art

“…Secondly, CSR could aim to achieve a competitive advantage through the reduction of business risk and associated costs. Some studies conclude that a company's environmental performance improves efficiency through reduced energy and resource costs, costs associated with compliance with environmental legislation, and other costs associated with business operations (Lister 2018). Finally, CSR could avoid the negative effects on profitability of internal and external factors, such as fluctuations in demand due to consumer boycotts, poor employee commitment, product quality problems, supplier-related scandals, etc.…”