Determinants of Corporate Carbon Reduction Targets

27 Pages Posted: 7 May 2014

See all articles by John W. Byrd

John W. Byrd

University of Colorado at Denver; University of Colorado at Denver

Elizabeth S. Cooperman

University of Colorado Denver

Ken Bettenhausen

University of Colorado at Denver - Business School

Date Written: May 5, 2014

Abstract

We investigate alternative hypotheses for a company’s choice for an intensity-only (carbon emissions relative to sales, production, etc.) versus an absolute carbon emissions goal. The hypotheses include: (1) a high growth firm hypothesis whereby high growth companies select an intensity goal, to continue to grow without an absolute emission reduction; (2) a high emissions industrial sector hypothesis where firms in industries with large carbon emissions prefer an intensity goal that is easier to reach; (3) a green window dressing hypothesis whereby firms tied to consumer acceptance select an easier to meet intensity target. Utilizing maximum likelihood logit regressions, we find a higher likelihood for firms with high growth potential, in high emission industries, and in the consumer eye to use easier to meet intensity versus absolute reduction goals. Firms with stronger brands, however, are associated with more transparent, absolute emission targets.

Keywords: Environmental Accounting, Carbon Reduction Targets, Global Warming

JEL Classification: Q56, Q54, M14

Suggested Citation

Byrd, John W. and Cooperman, Elizabeth S. and Bettenhausen, Kenneth, Determinants of Corporate Carbon Reduction Targets (May 5, 2014). Available at SSRN: https://ssrn.com/abstract=2433324 or http://dx.doi.org/10.2139/ssrn.2433324

John W. Byrd

University of Colorado at Denver ( email )

Department of Finance
Denver, CO
United States
970-247-9182 (Phone)

University of Colorado at Denver

Box 173364
1250 14th Street
Denver, CO 80217

Elizabeth S. Cooperman (Contact Author)

University of Colorado Denver ( email )

Campus Box 165, P.O. Box 173364
Denver, CO 80217
United States
303-315-8422 (Phone)
303-315-8084 (Fax)

Kenneth Bettenhausen

University of Colorado at Denver - Business School ( email )

1250 14th St.
Denver, CO 80204
United States

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