How Companies Respond to Climate Change

Abstract: EXTENDED ABSTRACT The overwhelming scientific consensus on the urgency of mitigating the potentially disastrous consequences of increasing levels of greenhouse gas emissions in the atmosphere and the emerging intergovernmental agreements on climate change have formed an external pressure that requires companies to develop business responses. Previous research has attempted to explain such responses to climate change mainly by drawing upon Carroll’s (1979) continuum of corporate social responsiveness. Accordingly, businesses would follow either defensive, accommodative or proactive approaches when they respond to climate change. These studies, however, are limited in its explanatory value as they view business responses to climate change as a task completed by an individual company rather than a task of companies embedded within wider business networks. In this study we proceed from the perspective that companies are, in fact, influenced by the interactions occurring as a result of continuous give-and-take exchange relationships. The urgent need to move beyond the view of companies as “isolated units” has been called for repeatedly (e.g., Wittneben et al., 2012, p.1435), but continues to receive little attention in the organizational studies literature. This study addresses this gap in the literature by adopting a network approach on business responses to climate change. It is through this move from the atomistic level of analysis and explanation to that of the business network that constitutes our theoretical lens to examine the empirical evidence that derives from five case studies of British energy supply companies. Indeed, by employing the network approach as a novel theoretical lens in the study of business responses to climate change, we provide a more comprehensive explanation of how companies respond to climate change. Key Words: Networks, Energy, Climate Change, Resources, Biases, Herding