Evolving Practices of Corporate Carbon Target Management: Outcomes and Implications.

Strategy researchers are increasingly paying attention to corporate climate change management with growing expectations from shareholders and other stakeholders. We examine carbon targets, a critical element in climate change management and note three key findings. First, roughly half of active carbon targets change before reaching the target year. On average, changed targets lead to higher subsequent emissions, especially if the change involves a lower per annum reduction, or target relaxation. In sharp contrast, target changes to a higher per annum reduction, or more aggressive targets, do not lower emissions. Second, our mechanism analysis reveals that the non-findings are closely associated with adoption of net zero and scienced based targets, two rapidly growing types of enhanced carbon targets. Firms that adopt these practices use carbon offsets to a greater extent than those do not, and their emissions tend to increase in the following years. Third, we find that adoption of these practices has significantly accelerated in the past three years, with this recent adoption associated with greater emissions increases, particularly in carbon emissions-intensive industries. We discuss implications of these for the emerging field of climate change and corporate sustainability strategy, and highlight opportunities for future research. [ABSTRACT FROM AUTHOR]