Effectiveness of Business Practices Related to Climate Change as a Driver for Improving Environmental Performance

Abstract

This study explores the relationship between business practices related to climate change and environmental performance. Using an international sample of analysis from 2013 to 2017, the paper examines how managerial incentives, public policy, disclosure, and responsibilities to executives on climate change, as corporate governance factors, affect a firm's environmental performance. By employing several regression analyses, our independent variables-incentives, public policy, disclosure, and responsibilities-show to improve the environmental performance in terms of reduction of GHG emissions. In addition, results show that stakeholders’ engagement seems less relevant in the US concerning other countries, this could be related to the US public opinion which exerts lower pressures on companies to deal with climate change. This study contributes to the environmental governance literature, where the impact of governance practices on environmental problem solving has not been widely studied.