Inderscience Publishers

Determinants of corporate carbon reduction targets


This paper examines attributes affecting a corporation’s choice of an intensity-only (carbon emissions relative to sales, production, etc.) versus an absolute carbon dioxide (CO
) emissions goal. We investigate alternative hypotheses for this choice including: 1) a high growth 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 high CO
emission industries 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. Utilising maximum likelihood logit regressions, we find a higher likelihood for firms with higher growth, in high emission industries, and those in the consumer/retail sector to be more likely to have an intensity-only CO
emissions goal. Corporations with stronger brands, however, are associated with more transparent, absolute emission targets

Keywords: environmental accounting, global warming, social responsibility, carbon reduction targets, climate change, green washing, absolute emissions reduction

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