Discussion and Student Response Business & Marketing Research Paper (Research Paper Sample)
Week 3 Case Discussion
5 Sources including the case are required
PLEASE USE THE ATTACHED CASE
This week's case is from the more academic literature and pertains to carbon/GHG emissions disclosures.
Questions for this Week:
1. The challenges of disclosure: Many companies realize that compiling GHG emissions is difficult. Discuss the risks and opportunities with providing incomplete or estimated emissions. When might estimating GHG emissions represent a significant business risk? When might the opportunity outweigh risks when estimating emissions?
Remember to support your answers by citing your source in APA style citations.
Please respond to the following discussion post, talk about what you agree with what you disagree with BACK UP YOUR RESPONSE WITH SOURCES FROM THE ATTACHED CASE STUDY OR OUTSIDE SOURCES
MUST FOLLOW APA.
On one hand, it is logical that measurement is a good practice for determining environmental impact, and the use of that data to inform strategic plans of management is likewise beneficial overall. One study indeed promoted that very notion, speaking of the essential nature of inclusion of environmental cost in corporate accounting in order to improve managerial decisions and subsequent outcome (Epstein, 1996). That very principal led, as discussed in the case for this week, to the establishment of the Global Reporting Initiative in 2001 and the Carbon Disclosure Project in 2000 (Blanco, Caro, and Corbett, 2017). The system, built on the concept of triple bottom line accounting, is voluntary. Given the increased demand for environmental accountability by consumers, it would appear at first that participation is intrinsically a very good move by a company (Dwyer, 2009). That perhaps becomes even more the case once it was realised that there is shared responsibility for environmental impact between consumers and producers, i.e., there is overlap of footprint (Lenzena, Murraya, Sack, and Wiedmann, 2007). Yet, the very presence of such an overlap points to the complex nature of measuring, reporting, and arguably more importantly, understanding environmental impact. With popular and political pressure for disclosure, the presence of such projects such as the CDP may very well create a sense of peer pressure that encourages companies to disclose without paying much heed to potential second order consequences to the company’s strategic goals. Furthermore, there is also question as to whether or not GHG-related management efforts in general actually lead to the desired environmental outcome of reduction in carbon emissions (Doda, Gennaioli, Gouldson, Grover, and Sullivan, 2015).
With that in mind, then, there may still be benefits to providing incomplete information or even estimated emissions. First, the mere act of measurement, if done properly, can have strategic benefits (Blanco, Caro, and Corbett, 2017). Additionally, since communication with investors and branding/reputation were among the top benefits that were reported by CDP participants, it would seem that in general the mere act of reporting, perhaps due to current public/consumer preferences, would result in benefits to the company (Blanco, Caro, and Corbett, 2017). That is, voluntary disclosure can yield a competitive advantage (Rankin, Windsor, and Wahyuni, 2011). Regarding public relations, when dealing with a “publicly hot” topic, it is surely not enough to do something good, but rather one must be seen to be doing something good by key stakeholders. All of the above, then, would suggest that there is indeed merit in reporting measurements, even if exact footprint levels, precise abatement amounts, and so on cannot be exactly measured at the moment. That is, the benefits of measuring and reporting suggest that it is better to go ahead and get something out now rather than waiting for potentially perfect information later (Blanco, Caro, and Corbett, 2017).
Company risk management is also a very valid reason for engaging in measurement and reporting (Blanco, Caro, and Corbett, 2017). However, reporting may yield risks of its own. Stakeholders such as investors may also be more concerned with more “esoteric” or “imaginary” viewpoints of carbon emissions and their relationship to appropriate corporate policy, profitability, etc. (Haigh and Shapiro, 2011). If that is the case, then investors might logically have a skewed viewpoint of corporate performance, both in terms of perceived future profit potential and a good environmental bottom line. Perhaps reporting GHG emissions could result in investors having an erroneous belief about what the company is actually doing, its financial and environmental health, and its performance relative to other companies. That looks to me like a serious risk of disclosing voluntarily.
Even with risks associated with disclosure, though, opportunities may exist. As the case mentioned, companies often have been going for the so-called “low hanging fruit” (Blanco, Caro, and Corbett, 2017). Yet, by measuring and disclosing, opportunities to address particularly environmental impact within the supply chain allows for long-term potential improvements beyond what could be done easily within the firm itself due to diminishing marginal returns (Blanco, Caro, and Corbett, 2017). That provides highly valuable information to management to drive forward strategic policy, manage risk through addressing issues in the supply chain, and provides potential additional metrics for performance evaluation. If the disclosure shows that the company itself, for example, has done what it can reasonably do now, but its overall footprint from a lifecycle standpoint is less desirable due to issues in its supply chain, that would seem to me to provide a public relations opportunity to show the potential for future growth through supply chain improvements while further demonstrating the company’s proven commitment to the environmental component of the triple bottom line.
In conclusion, whenever information is released, it is out there for all to see (especially in the Internet age!). That does mean that there is a risk involved with releasing GHG information, but at the same time people have a tendency to fill in the gaps when information is not provided – and often and a very negative way. In a situation of limited information, people tend to fill in the gaps based on their own existing biases and the contextual information, all while ignoring unknown factors and replacing them with those biases and contextual information that they think might fit neatly in the gap, no matter how erroneous (Sanbonmatsu, Kardes, Posavac, and Houghton, 1997). Thus situational awareness is key, and information logically should be put out in a way that helps to fill in gaps in the minds of stakeholders, although that is admittedly not easy. Awareness of the risks can help a company avoid those risks and move forward to take advantage of opportunities.
Blanco, C., Caro, F., and Corbett, C. (2017). An inside perspective on carbon disclosure. Business Horizons, 60.
Doda, B., Gennaioli, C., Gouldson, A., Grover, D., and Sullivan, R. (2015). Are Corporate Carbon Management Practices Reducing Corporate Carbon Emissions? Corporate Social Responsibility and Environmental Management, 23(5).
Dwyer , R.J. (2009). Keen to be green” organizations: a focused rules approach to accountability. Management Decision, 47(7).
Epstein, M.J. (1996). Improving Environmental Management with Full Environmental Cost Accounting. Environmental Quality Management, 6 (1).
Haigh, M. and Shapiro, M.A. (2011). Carbon reporting: does it matter? Accounting, Auditing & Accountability Journal, 25(1).
Lenzena, M., Murraya, J., Sack, F., and Wiedmann, T. (2007). Shared producer and consumer responsibility — Theory and practice. Ecological Economics, 61(1).
Rankin, M., Windsor, C., and Wahyuni, D. (2011). An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system: Australian evidence. Accounting, Auditing & Accountability Journal, 24(8).
Sanbonmatsu, D.M., Kardes, F.R., Posavac, S.S., and Houghton, D.C. (1997). Contextual Influences on Judgment Based on Limited Information. Organisational Behaviour and Human Decision Processes, 69(3).
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Discussion and Student Response
PART 1: Challenges of disclosure
The carbon disclosure project has continued to be a heated debate, mainly because of the emissions that arise from various industries. There is a need for managers to come up with strategies to counter the rate at which gases are being emitted and counter the effects arising from the same. Processes involved in the measurement and disclosure bring a lot of different benefits to an organization. Emission reduction processes should be put into higher considerations, too, as they also come with opportunities in the supply chain. Providing estimated and incomplete emission poses enormous risks and opportunities since the compilation of these emissions has been deemed difficult for many companies. There is a need for a balanced human-driven budget for greenhouse-gas (Williamson, 2016). To achieve a balanced budget, agriculture farms and industries ought to produce zero emissions or come up with ways that will aid in the removal of those gases in a moderated design (Rogelj et al., 2016). When it comes to limiting warming up to two degrees Celsius, some amount of carbon dioxide needs to be extracted and stored per year.
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