TY - JOUR

T1 - Combating Climate Change through Organisational Innovation

T2 - An Empirical Analysis of Internal Emission Trading Schemes

AU - Hörisch, Jacob

PY - 2013

Y1 - 2013

N2 - Purpose: This paper aims to identify under which circumstances company internal emission trading schemes (IETS) are applied and to examine their actual effects on corporate greenhouse-gas (GHG) emissions. Design/methodology/approach: Using contingency theory, factors are identified that influence corporate decisions to introduce an IETS. To examine the effects of IETSs, emissions data for a sample of large German companies is used for linear regression modelling. Findings: The paper finds that today, IETSs are mainly applied by companies with high levels of emissions that are subject to external trading schemes. The current use of IETSs seems to be primarily driven by the interest to reduce emissions cost-efficiently. Testing the effects of IETSs reveals that they are able to reduce corporate GHG emissions significantly. Research limitations/implications: The effects of IETSs are only tested for companies subject to an external emission trading scheme. Furthermore, the analysis does not distinguish between different types of IETSs. Future research should address the issue of whether the reductions observed also hold true for companies not subject to external trading schemes and should formulate recommendations on how IETSs should be designed. Practical implications: The paper informs practitioners about the potential benefits of IETSs. Originality/value: For the first time, the effects of IETSs are tested for companies subject to an external emission trading scheme. The analysis suggests that a new academic debate on IETSs is needed as the introduction of external emission trading schemes has not rendered IETSs redundant.

AB - Purpose: This paper aims to identify under which circumstances company internal emission trading schemes (IETS) are applied and to examine their actual effects on corporate greenhouse-gas (GHG) emissions. Design/methodology/approach: Using contingency theory, factors are identified that influence corporate decisions to introduce an IETS. To examine the effects of IETSs, emissions data for a sample of large German companies is used for linear regression modelling. Findings: The paper finds that today, IETSs are mainly applied by companies with high levels of emissions that are subject to external trading schemes. The current use of IETSs seems to be primarily driven by the interest to reduce emissions cost-efficiently. Testing the effects of IETSs reveals that they are able to reduce corporate GHG emissions significantly. Research limitations/implications: The effects of IETSs are only tested for companies subject to an external emission trading scheme. Furthermore, the analysis does not distinguish between different types of IETSs. Future research should address the issue of whether the reductions observed also hold true for companies not subject to external trading schemes and should formulate recommendations on how IETSs should be designed. Practical implications: The paper informs practitioners about the potential benefits of IETSs. Originality/value: For the first time, the effects of IETSs are tested for companies subject to an external emission trading scheme. The analysis suggests that a new academic debate on IETSs is needed as the introduction of external emission trading schemes has not rendered IETSs redundant.

KW - Sustainability sciences, Management & Economics

KW - Contingency theory

KW - Corporate social responsibility

KW - EU Emission Trading Scheme

KW - Global warming

KW - Internal emission trading schemes

KW - Organizational innovation

KW - Economics, empirical/statistics

KW - Management studies

KW - Sustainability Science

KW - Economics

KW - Entrepreneurship

UR - http://www.scopus.com/inward/record.url?scp=84885055234&partnerID=8YFLogxK

U2 - 10.1108/CG-06-2013-0077

DO - 10.1108/CG-06-2013-0077

M3 - Journal articles

VL - 13

SP - 569

EP - 582

JO - Corporate Governance

JF - Corporate Governance

SN - 1472-0701

IS - 5

ER -