Climate change activities and strategies

Climate change activities are typically classified as mitigation and adaptation.

Mitigation refers to activities aiming to cut down GHG and other emissions in order to prevent further global warming (Pinkse & Kolk, 2012). Internal activities leading to reductions in energy use mainly consist of changes in the production process enabled by technological developments in addition to new product development, product innovations, and changes in organisational culture (Kolk &

Pinkse, 2004). As well as paying attention to energy use, companies can focus on the types of energy sources. Carbon-based technologies can be substituted by purchasing carbon-free renewable energy or by building the capacity to generate renewable energy in the form of solar or wind power, for example (Kolk & Pinkse,

42

2004; Slawinski & Bansal, 2012). Activities to reduce emissions can also be externally-oriented (Kolk & Pinkse, 2004). Such activities can focus on impacting subcontractors’ activities or customers’ emissions through improved energy efficiency of products and services.

So far most business climate change activities have focused on mitigation and organisations are only beginning to consider adaptation (Kolk & Pinkse, 2011).

Adaptation refers to activities by which a company learns to deal with actual or expected impacts of climate change (Klein, Schipper, & Desai, 2005), for example by operating in a low-carbon society with weather extremes and higher energy prices. Research has suggested that adaptation occurs as a pre-emptive response to increasing awareness and perceived risks and uncertainty. Recently, Haigh &

Griffits (2012) have argued that adaptation occurs as a result of organisations being surprised by changing climatic conditions rather than as a proactive process as discussed in previous literature.

Berkhout, Hertin and Gann (2006) have identified that companies can adapt by making changes to their commercial strategy, technologies used to provide products or services, financial management systems and information and monitoring processes. The required adaptation strategies differ between industries;

for example agriculture will face more severe impacts than a clothing store. Both mitigation and adaptation cover a wide variety of activities of which some are a part of companies’ existing competences while some require new resources and innovativeness. In addition, some activities, such as substituting carbon-based energy with renewable energy sources, have both mitigation and adaptation elements.

The limitations of the existing categorisations and notions to address climate change have been explicated by Slawinski and Bansal (2012). For one, Slawinski and Bansal (2012) have discussed the typical categorisation of responses to environmental and social issues along a continuum from reactive, or defensive, to proactive, which has been also used in climate change research (Boiral et al., 2012).

According to this categorisation, reactive companies deny responsibility and resist responding to social and environmental issues while proactive companies strive to take a leadership position. Slawinski and Bansal (2012) suggested that this categorisation might not be sufficient to provide a thorough explanation of corporate responses to climate change. The authors criticised the hierarchical categorisation implying that one category is superior to another and present that companies can engage in activities that cannot be limited to one distinct category.

43

For instance, companies emphasising compliance and risks can appear reactive yet their activities focusing on energy efficiency could be categorised as proactive.

For second, Slawinski and Bansal (2012) have argued that an organisation’s time perspective relates to its responses to climate change. They have identified two groups of organisations based on their time perspective. The first group of organisations exhibited a linear time perspective that refers to time progressing from past to present and future. These organisations were focused on internal operations to innovate new technologies to improve energy efficiency and competitiveness. They focused on the present and tended to execute a narrow set of solutions to climate change, but they were able to respond with agility and speed. The second group of organisations exhibited a cyclical time perspective that refers to a view where events are seen to repeat themselves. These organisations engaged in a broad range of activities and collaborated with other actors to identify new solutions to climate change, but the breadth of these activities and the complexity of the issue impeded swift responses.

Corporate climate change strategies have been identified as political or non-market, (e.g. influencing policy debates, opposing upcoming regulations) and market strategies (e.g. product and process improvements, emissions trading) (Kolk & Pinkse, 2005, 2007a). Political strategies are most discussed in literature in the US context and related to large multinational corporations such as oil and gas companies (e.g. Kolk & Pinkse, 2005, 2007a). These companies have an integrated strategy consisting of political and market activities that are company-specific and dependent on the perceived risks and opportunities related to climate change and the type of regulation the company is imposed to (Kolk & Pinkse, 2005).

A three-step continuum has been suggested for evaluating corporate climate change strategies (Kolk, 2000). At one end, a defensive posture refers to active opposition of international climate agreements. The opportunistic/hesitant strategy involves preparation for possible regulatory and market changes. At the other end, companies following an offensive strategy strive to take the first step for environmental reasons and increase their competitiveness. At the same time, the potential risks of changing climate are considered so severe that precaution is in order. Kolk and Pinkse (2004) note that companies can move between these strategies and that there might be divergent views between different geographical locations of large organisations.

Kolk and Pinkse (2005) have identified that companies can choose to implement an innovation or a compensation strategy. A company using an innovation strategy focuses on improving its activities or assets through the

44

development of new technologies or services. A compensation strategy means that a company does not primarily aim to reduce emissions, but merely transfers emissions or emission-generating activities within the company or to other companies. These strategies can be implemented by individual companies or by interacting with other actors. This classification does not explicitly take into account the adaptation perspective since it has a clear emphasis on the present and on short-term activities. It could be argued, though, that some of these activities have long-term effects in addition to the direct, short-term ones. For example, the development of new technologies can have substantial effects on future activities which have not been even planned yet. The classification of innovation and compensation strategies has a short-term, mitigation orientation implied.

To summarise, previous literature has identified and empirically examined climate change activities using a categorisation to mitigation and adaptation activities. The notions presented by Slawinski and Bansal (2012) highlight the challenge of using existing terminology to address climate change, for these conceptualisations and categorisations are developed to address mostly environmental issues whereas climate change is more complex than a ‘mere’

environmental challenge. In addition to climate change activities, climate change strategies have attracted empirical research. This study does not address climate change activities or strategies as such, rather the constructionist approach of this study directs attention to how climate change engagement is constructed in business organisations. In turn, this study maintains that the ways that climate change engagement is discussed have consequences for subsequent action (Joutsenvirta, 2006) and hence this study explicates also the functions (Potter &

Wetherell, 1987) of the climate change engagement discourses.