Disclosed Corporate Response to Climate Change: An Analysis of Brazilian Carbon Efficient Index (ICO2)

Theme Corporate Sustainability and Innovation Track Corporate Sustainability Strategy Justification Brazil has committed itself to reducing its Greenhouse Gas (GHG) emissions 38.9% by 2020. There are few studies dedicated... [ view full abstract ]

Theme
Corporate Sustainability and Innovation

Track
Corporate Sustainability Strategy

Justification

Brazil has committed itself to reducing its Greenhouse Gas (GHG) emissions 38.9% by 2020. There are few studies dedicated to analyze the Brazilian corporate responses to climate change. This paper contributes to understanding the Brazilian Carbon Efficient Index (ICO2) as a corporate response to climate change. The ICO2 aims to report the carbon efficiency of Brazilian stock exchange companies.

Purpose

Analyze the ICO2 as a corporate response to climate change.

Theoretical framework

Climate change has changed the investors’ behavior regarding the destiny of their investments. They prefer to invest in companies with proactive and innovative corporate carbon disclosure strategies. Most of the corporate initiatives currently used by companies in order to disclose their responses to climate change to the investors and other stakeholders are: Carbon Disclosure Project (CDP), GHG Protocol and Clean Development Mechanism (CDM). These corporate initiatives could contribute to increasing companies’ value in the stock exchange market.

Results/conclusions

The results of this study show that the Brazilian companies which have more corporate initiatives to face climate change and which have improved their carbon efficient index are: pulp & paper, mining, chemical and cosmetic. Most of the corporate initiatives reported by these sectors are: CDP, GHG Protocol and CDM. In conclusion, this paper defends that the ICO2 could contribute as incentive to other Brazilian companies to reduce their GHG emission by 2020.

Implications Tipping Points

Disclosure the corporate responses to climate change is important in order to incentive GHG emission reductions, promoting cleaner technologies and sustainable development in developing countries. The analysis of the ICO2 is essential to identify the challenges and opportunities for business decision-makers to face the risks of climate change.

Keywords: climate change; corporate response; carbon efficient index; Brazil.