2015-26
How do firms’ climate-related management and strategy affectclimate change risks and opportunities awareness?
Yuchen Shen Qi Wu Mahammod Tazul Islam
Michiyuki Yagi Katsuhiko Kokubu

How do firms’ climate-related management and strategy affect climatechange risks and opportunities awareness?

Yuchen Shen *, Qi Wu *, Mahammod Tazul Islam *, Michiyuki Yagi*, Katsuhiko Kokubu*
沈宇辰・呉綺・タズル イスラム・八木迪幸・國部克彦

Abstract
Climate change is an international environmental issue that has increasingly attracted businessattention in the past decade because of its actual or potential strategic impact on many companies.
This study aims to examine how risk and opportunity awareness is correlated with corporate
management and strategy. This study obtains firm data from a questionnaire survey of CDP in 2013,
and the data includes 899 observations for risk awareness and 827 observations for opportunity
awareness in 64 countries and 20 industry groups. Using the data, this study empirically examines
how firms’ management and strategy affect risk and opportunity awareness related to climate change
in the regression analysis. By regression analysis, we find some types of corporate climate-related
governances and strategies are related to risk and opportunity awareness. The regression result also
shows that there seems to be few differences between the effectiveness of firms’ climate-related
management on their business risk and opportunity awareness related to climate change. Corporate
strategies such as setting emissions reduction targets, launching emissions reduction initiatives,
participating emissions trading schemes, and originating/purchasing carbon credits are proved foundto be beneficial for increasing the corporate risk and opportunity awareness
Key words: climate change; risk and opportunity awareness; CDP; corporate
governance; supply chain activities
JEL classification: M14, Q54, Q56*

Graduate School of Business Administration, Kobe University
Address: 2-1, Rokkodai-cho, Nada-ku, Kobe-city, 657-8501, Japan
Email: jasper-shen@hotmail.com

11. Introduction
While climate change has become a center-stage focus, companies worldwide are getting
more interested in mitigating risks and seeking opportunities related to greenhouse gas (GHG)
emissions reduction. The relationship among environmental performance, risk, and risk management
is considered to be increasingly important and crucial for business success (Dobler et al., 2014).
However, there is little evidence about this relationship. Regarding risk management, there are often
various corporate strategies and corresponding information asymmetry. To avoid risk and encounter
greater opportunity, companies often adopt multiple actions in combination, such as stakeholder
engagement and corporate policy implementation. In addition, business risk and opportunity
awareness (i.e., recognition) related to climate change vary among companies and often differ
between companies and stakeholders such as investors (Solomon et al., 2011). Hence, this study
aims to examine how risk and opportunity awareness is correlated with corporate governance andstrategy and engagements with other organizations. This study especially focuses on risk andopportunity awareness related to climate change, which has increasingly become of interest among
companies and stakeholders using the CDP dataset for worldwide firms in 2013.
Understanding how companies tend to respond to risk or opportunity affords a clue toimprove environmental performance among whole industries. This understanding also helps us toform expectations about corporate behavior related to climate change and will contribute to the risk
management literature as an evidence-based study.
Managers are already working on a range of business risks and opportunities, and climatechange adds a new dimension for managers to consider. It is generally recognized that climatechange creates potential risks and opportunities for businesses as following various forms: physicalclimate effects, GHG emission regulations, consumption attitudes of customers, investment conceptsof shareholders, and evolving product or service markets. Business is vulnerable to climate change
due to the fact that their operational behaviors have a high probability of negative impact associatedwith the physical and regulatory effectives of climate change (Jira and Toffel, 2013). From a positive2

perspective, management of GHG emissions is not only beneficial for building brand image but also
for expanding market share (Hopkins, 2010). In order to mitigate risks and pursue opportunities,
managers should have a better and deeper understanding of not only the corporation’s own status but
also other organizations’ conditions and reactions regarding climate change.
The paper is structured as follows. Section 2 introduces the literature review about risk
management and corporate governance and explains CDP. Section 3 discusses research methodology,
explaining the empirical model and our data. Section 4 presents the research results based on the
regression model, identifying determinants respectively for risk and opportunity awareness. Section
5 concludes, mentioning implications for business, limitations of this research, and dimensions forfurther study.

2. Backgrounds
2.1 Risk management and corporate governanceIn the risk management literature, companies are considered to often face risks that are
categorized into several types. Dobler et al. (2014) classify environmental risks into three types:
regulations, operations, and nature. As a consistent pattern across industries, risk from regulations is
the type that has the highest frequency and largest scale, risk from operations is most likely to have acatastrophic impact upon the firm, and risk from nature is the type that is least likely to be subject toactive risk management. Controlling for inter-industry differences, the authors demonstrate anegative relationship between environmental performance and environmental risks at the firm level.
More particularly, the relationship appears to be significant for total environmental risks andstrongest for risks from operations, while risks from nature tend to be not relevant.
To avoid or mitigate corporate risks, an organization often must implement risk
management adequately. In terms of how efficient risk management of companies is, it is wellknown in the corporate governance literature that corporate governance has a key role in managing
corporate risk, such as climate change issues. Especially, in Galbreath (2010), it is found that3

corporate performance is largely affected by corporate governance. The author conducts an
exploratory study on corporate governance practices, addressing climate change in 98 firms insideand outside the U.S. Overall, the study indicated that non-US firms appear to demonstrate higher
performance than U.S. firms due to institutional pressure. Furthermore, firms with larger boards,
separate CEO–board chair roles, younger directors, and a higher percentage of inside directors seemto have a structure that brings about higher performance across governance practices that address
climate change.
As Galbreath notes, to make risk management effective, stakeholder (e.g., institutions orinvestors) pressures or dialogues are considered to be important. Peters and Romi (2014) examine
the association between the voluntary disclosure of GHG information and corporate governancemechanisms based on data from the CDP (see the next sub-section) from 2002 until 2006. The
authors claim that the existence of environmental committees on boards of directors and corporate
sustainability officers (CSOs) has a positive relationship with the likelihood and transparency of
GHG disclosures. Additionally, among several characteristics of the board such as committee size
and number of committee meetings, only expertise of the environmental committee members andCSO confirms a positive correlation with GHG disclosure transparency, while committee size tends
to be negatively correlated.
In addition, in terms of the risk management and corporate governance, some theoreticalmodels are constructed to examine how the corporate governance works in terms of mitigating
corporate risks such as in Brown et al. (2009). The authors put forward a new risk management
model that aims at enhancing the management and oversight of corporate risk in a highly complex
and dynamic risk environment. The model suggests that an appropriate governance mechanism liesin the creation of a separate risk management committee utilizing enterprise risk management. Thisrisk management committee would include members drawn from the audit committee and fromoperational management that engages regularly with the board and the audit committee.
Based on the discussion about the relationship between risk management and corporate
governance, this study hypothesizes that risk and opportunity awareness and corporate governance4

are highly correlated with each other. That is, corporate governance or strategy is characterized bycertain degrees of risk (or opportunity) awareness. This idea originates from the discussion that there
are some gaps between investors and companies in terms of determinants that influence corporaterisk and opportunity awareness from climate change in Solomon et al. (2011).
According to the authors, because societal anxiety surrounds climate change risk,
institutional investors (as the primary financial stakeholders of corporation) tend to be highly
concerned about how climate change affects their investment return. As a consequence, companies
are starting to disclose information on climate change impacts through public climate changereporting. Corporate climate change reporting is defined as mechanisms by which organizations
position themselves as engaging in dialogue about their social and environmental impacts and ameans by which managers make sense of sustainable development themselves. Just as disclosure ofclimate-related risks, corporate climate change reporting is evolving to disclose opportunities withinstitutional investors identifying potential financial benefits from corporate climate change
strategies and investment in green products and technologies. As discussed above, this study
hypothesizes that risk and opportunity awareness is related to types of corporate governance or
strategy, and we empirically examine the proposed hypothesizes based on the CDP dataset.

2.2 CDPThe CDP is an independent, non-profit organization based in the United Kingdom thatworks with shareholders and corporations to disclose the GHG emissions of major corporations. In
2000, the CDP was established to accomplish two goals: to inform managers about investors’
concerns about climate change and to inform investors about firms’ risks associated with climatechange. The first target is achieved by sending a questionnaire to the largest global public firms. The
second target is achieved by producing reports that aggregated responses available online (Stannyand Ely, 2008). It is generally acknowledged that CDP is the most important source of information
on GHG emissions. Participation in the CDP questionnaire allows us to capture the firms’
information relevant to investors relating to the business risks and opportunities from climate change

5

(Kolk et al., 2008).
According to the report produced by CDP and 2050 (2014), CDP recognizes three typesof risk and opportunity that are driven by changes in regulation, changes in physical climateparameters, and changes in other climate-related developments. Moreover, risks and opportunities
are relative situations rather than absolute ones depending on different companies. Where one
company confirms a risk generated from climate change, another company may identify a business
opportunity in the same circumstance. When considering changes in regulation, companies primarily
concentrate on the potential increased operational costs caused by emission limits and added
taxation.
Additionally, risks and opportunities can also arise from other aspects such as emission
reporting obligations, regulations, and international agreements. Changes in physical climateparameters have the greatest influence on business activities. Generally, companies identify plenty ofrisks driven by physical effects of climate change, which mainly include damage to corporate
infrastructure and disruption to supply chains. On the other hand, companies can also recognize
massive business opportunities by developing and innovating new products and services that adapt
to climate change. There are also risks and opportunities driven by other climate-related
developments. Since investors, consumers, and supply chain partners will be more willing to workwith climate-responsible companies due to their positive reputation, companies tend to be motivatedto work actively with climate change. Moreover, an eco-conscious corporate culture withincompanies may help managers motivate, attract, and retain talented employees.
The CDP also asks companies about associated corporate GHG management. The
questions mainly focus on corporate climate-related governance, strategy, and targets. This dataset isused in the empirical way in the following three studies. Weinhofer and Hoffmann (2010) perform acontent analysis on 91 electricity producers’ answers to CDP in order to investigate whether and how
companies adjust their business operations with a goal to lower CO2 emissions. They find that halfof the companies take parallel emission management measures that target strategic objectives
including CO2 compensation, CO2 reduction, and carbon independence. They also find that6

companies with different CO2 strategies significantly differ in terms of regional affiliation, company
size, and absolute amount of CO2 emissions. Rankin et al. (2011) investigate the relationshipbetween GHG emission disclosure and corporate GHG management and find that firms thatvoluntarily disclose GHGs to CDP are more likely to have better environmental management
systems and higher corporate governance quality. Reid and Toffel (2009) examine the rate ofcorporate’s response to the CDP questionnaire and find that companies which have already dealt
with shareholder actions in terms of environmental issues show a higher probability of public
information disclosure to CDP. The authors also find that companies operate within the bounds ofcarbon emission trading laws are more likely to disclose GHG emission information.

3. Methodology
This study obtains firm data from a questionnaire survey of CDP in 2013. Using the data,
this study empirically examines how firms’ management and strategy affect risk and opportunity
awareness related to climate change in the regression analysis. Descriptive statistics of these data areshown in Table 1. The data include 64 countries and 20 industry groups. The number of observations
is 899 for risk awareness and 827 for opportunity awareness.
The dependent variables are the degree of risk and opportunity awareness. These twovariables take a value from 0 to 3 when certain firms answer that they recognize risk or opportunity
in terms of the following three points: changes in regulation, physical climate parameters, and otherclimate-related developments. If firms recognize all three elements in terms of risk, the risk value is
3. The average values of risk and opportunity awareness are 2.16 and 2.15, respectively.
Meanwhile, independent variables consist of dummy variables based on ten questions,which are divided into two categories: corporate management and strategy (Questions 1 to 6) andenvironmental activities with other organizations (Questions 7 to 10). This study examines whether
these determinants are statistically correlated with risk and opportunity awareness. Regarding
corporate governance (management and strategy) (Questions 1 to 6), Question 1 asks where the7highest level of direct responsibility for climate change is within a company (1: Individual/sub-set ofthe board; 2: Other manager/officer; 3: Senior manager/officer; Baseline: None). Question 2 asks the
respondent to best describe the company’s risk management procedures with regard to climatechange risks and opportunities (1: Specific climate change risk management process; 2: Integrated
risk management processes; Baseline: None). Question 3 asks whether a company engages in
activities that could either directly or indirectly influence policy on climate change with policy
makers (1: Direct engagement; 2: Funding research organizations; 3: Trade associations; 4: Other;
Baseline: None). Question 4 asks whether there is an emissions reduction target (1: Absolute andintensity targets; 2: Absolute target; 3: Intensity target, Baseline: None). Q5 asks whether the use ofcompany’s goods and/or services directly enables GHG emissions to be avoided (1: Yes; 2: No). Q6
asks whether there are emission reduction initiatives in place, including those in the planning and/or
implementation phases (1: Yes; 2: No). In addition, we control for country- and industry-fixed
effects in the model.
On the other hand, regarding environmental activities with other organizations(Questions 7 to 10), Question 7 asks whether a company participates in any emissions trading
schemes (1: Currently in participation; 2: Anticipating to participate in 2 years; Baseline: Not
anticipating to participate in 2 years). Question 8 asks whether a company originated or purchased
any project-based carbon credits within the reporting period (1: Yes; 2: No). Question 9 asks what
elements indicate the verification/assurance status that applies to the company’s scope 3 emissions(1: Third-party verification or assurance underway but not yet complete – last year’s statement
available; 2: Third-party verification or assurance underway but not yet complete – first year it has
taken place; 3: Third-party verification or assurance complete; Baseline: No third-party verification
or assurance). Question 10 asks whether a company engages with any of the elements of value chain
on GHG emissions and climate change strategies (1: Suppliers; 2: Customers; 3: Other partners;
Baseline: None).

8

4. Results
The regression result with questionnaires of corporate management and strategy(Questions 1 to 6) and questionnaires of environmental activities with other organizations (Questions
7 to 10) are shown in Table 2 and Table 3, respectively. In Table 2, columns 1 and 2 show the result
using risk and opportunity awareness as dependent variables, respectively. Regarding Question 1, thecoefficient of the individual/sub-set of the board is statistically significantly positive for opportunity
awareness and not statistically significant for risk awareness. On the other hand, the coefficients ofother manager/officer and senior manager/officer are not statistically significant in both columns.
Regarding Question 2, the coefficient of integrated risk management process is statisticallysignificantly positive for risk and opportunity awareness. On the other hand, the coefficient ofspecific risk management process is not statistically significant in both columns. Regarding Question
3, when referring to engagement with policy makers, the coefficient of trade associations isstatistically significantly positive for both risk and opportunity awareness. In contrast, the coefficientof funding research organizations is statistically significantly positive for risk awareness and not
significant for opportunity awareness. On the other hand, the coefficients of direct engagement andother are statistically significantly positive for opportunity awareness and not significant for risk
awareness. Regarding Question 4, in regard to the emissions reduction target, the coefficients of all
types of targets are statistically significantly positive for both risk and opportunity awareness.
Regarding Question 5, the coefficient of goods/services enabling GHG emissions avoidance isstatistically significantly positive for both risk and opportunity awareness. Regarding Question 6, thecoefficient of emissions reduction initiatives, including those in the planning and/or implementation
phases, is statistically significantly positive for both risk and opportunity awareness.
In Table 3, columns 1 and 2 show the result of using risk and opportunity awareness as
dependent variables, respectively. Regarding Question 7, the coefficient of currently in participationis statistically significantly positive for both risk and opportunity awareness, while the coefficient of
anticipating participation within 2 years is statistically insignificant in both columns. Regarding9Question 8, the coefficient of originated/purchased carbon credits is statistically significantly
positive for both risk and opportunity awareness. Regarding Question 9, the coefficient of complete
third-party v/a is statistically significantly positive for both risk and opportunity awareness, and thecoefficient of incomplete third-party v/a: last year’s statement available is statistically insignificant
in both columns. However, the coefficient of incomplete third-party v/a: first year it has taken placeis statistically significantly positive for risk awareness and not significant for opportunity awareness.
Regarding Question 10, the coefficients of suppliers and customers are statistically significantly
positive for both risk and opportunity awareness, while the coefficient of other partners is
statistically significantly positive for opportunity awareness and not significant for risk awareness.

5. Conclusion
The purpose of the study is to examine the effectiveness of firms’ climate-related
management on their business risk and opportunity awareness and to analyze the relationshipbetween activities with other organizations and risk and opportunity awareness. Regarding thecorporate management and strategy, risk awareness is likely to correlate with the following items:
Q2) integrated risk management process with regard to climate change, Q3) engagement in activities
influencing policy through funding research organizations and trade associations, Q4) absolute andintensity targets and absolute target and intensity target active in a company’s GHG management,
Q5) goods/services enabling GHG emissions avoidance, Q6) emissions reduction initiatives, Q7)
current participation in emissions trading schemes, Q8) originated or purchased carbon credits, Q9)
complete third-party verification or assurance applying to the company’s scope-3 emissions, andQ10) engagement with suppliers and customers of value chain on GHG emissions and climatechange strategies. On the other hand, opportunity awareness is related to the following items: Q1)
individual/sub-set of the board or other committee appointed by the board acting as the highest levelof direct responsibility for climate change, Q2) integrated risk management process with regard toclimate change, Q3) engagement in activities influencing policy through trade associations, other, or

10

direct engagement, Q4) absolute and intensity targets, absolute target, and intensity target active in acompany’s GHG management, Q5) goods/services enabling GHG emissions avoidance, Q6)
emissions reduction initiatives, Q7) current participation in emissions trading schemes, Q8)
originated or purchased carbon credits, Q9) complete third-party verification or assurance applying
to the company’s scope-3 emissions or incomplete but available for last year’s statement, and Q10)
engagement with suppliers, customers, or other partners of value chain on GHG emissions andclimate change strategies.
From this point, we discuss the implication of the results and make suggestions for firms
and policymakers. According to the regression results, there seem to be few differences between theeffectiveness of firms’ climate-related management on their business risk and opportunity awareness.
The results verify the assumption that corporate risk and opportunity awareness are correlated andable to convert from/to each other. Therefore, it is possible for a company to develop some strategies
that simultaneously increase corporate risk and opportunity awareness. Corporate strategies such as
setting emissions reduction targets (Q4), launching emissions reduction initiatives (Q6),
participating in emissions trading schemes (Q7), and originating/purchasing carbon credits (Q8) arefound to be beneficial for increasing corporate risk and opportunity awareness related to climatechange. Moreover, as Christopher (2011) points out, along with the rapid development of scienceand technology and the globalization of the market and economy, the nature of business competitionin the future will be combat between supply chains rather than companies. In today’s competitive
business environment, the effectiveness and efficiency of a company’s supply chain performance
determines the difference between success and failure to a great extent. It is therefore essential for acompany to cooperate and collaborate with supply chain partners to engage in GHG emissions andclimate change strategies in order to identify potential business risks and opportunities and finallypromote common development.
However, there are still some findings in the study that have drawn our attention. Firstly,
it seems to be generally accepted that corporate risk awareness culture should start at the board leveland extend all the way down to the shop floor. However, according to the regression result, an

11individual/sub-set of the board or other committee appointed by the board acting as the highest levelof direct responsibility for climate change (Q1) tends to be irrelevant to corporate risk awareness
related to climate change. This indicates that, when becoming aware of opportunities for climatechange rather than risk, companies are likely to authorize an individual/sub-set of the board to own
the highest degree of controllability. Because opportunity awareness is more related to play-to-win
strategy, which requires the selection and concentration of business resources as opposed to the
not-to-lose strategy, it implies that authorizing the individual/sub-set of the board is compatible withfocusing their business resources on the fields related to climate change. From the viewpoint ofinvestors, when the individual/sub-set of the board has the highest responsibility for climate change
issues, it implies that there is a good chance of taking competitive advantage in the market. Secondly,
while a specific risk management process with regard to climate change (Q2) is not relevant tocorporate risk or opportunity awareness related to climate change, an integrated risk management
process (Q2) has a significant effect on both corporate risk and opportunity awareness. This might bedue to the fact that managing climate-related opportunities and risks is an integral part of corporate
governance system. In terms of scope, the integrated into multi-disciplinary company-wide risk
management processes should cover both strategic and operational risks from the following areas:
environment, economic and political frameworks, procurement, production/supply chain, sales andcapital markets, information technology, product development, and human resources.
Finally, we identify some limitations of this study and dimensions for future research.
Firstly, while our study empirically examines what firms’ climate-related management and strategies
are significantly related to corporate risk and opportunity awareness associated with climate change,
the study fails to provide evidence to prove the causal relationship between both. Therefore, tofurther explore how organizational functions affect the formation of risk and opportunity awareness,
inside analysis of the company is necessary. Secondly, the sample companies for which we obtaindata from the questionnaire of the CDP are the companies have already completed the CDP survey.
According to the main targets of the CDP (Stanny and Ely, 2008), to some extent, this means thesecompanies are already more concerned about their business risks associated with climate change,

12

which may lead to sample bias. Finally, firms’ climate-related management and strategy should havelong-term effects on corporate risks and opportunities awareness associated with climate change.
However, our ability to analyze the long-term effects is limited by the fact that only one year (2013)of responses to the CDP survey are investigated in our study. As the CDP intends to continue
surveying this group of companies, future research might explore longer-term trends byincorporating the future survey responses of the CDP.

ACKNOWLEDGEMENT
This study was carried out as part of the SESAMI project in Kobe University and was
supported by research grant from the Research Institute of Advanced Management. We would like tothank Masashi Yasuda, Ryuji Shimono, and all concerned members of Panasonic Corp. forarranging and coordinating our research survey.

13

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Table 1. Descriptive statistics of all variables
Variable
Dependent Variables
Risk awareness
Opportunity AwarenessIndependent Variables
Corporate management and strategy
Q1. Direct responsibility for climate change
Individual/sub-set of the board
Other manager/officer
Senior manager/officer
Q2. Option of risk management approach:Specific risk management process
Integrated risk management process
Q3. Engagement with policy makers
Direct engagement
Funding research organizations
Trade associations
Other
Q4. Emissions reduction target
Absolute and intensity targets
Absolute target
Intensity target
Q5. Goods/services enabling GHG emissions avoidance
Q6. Emissions reduction initiatives
Environmental activities with other organizations
Q7. Emissions trading schemes:
Currently in participation
Anticipating to participate in 2 years
Q8. Originated/purchased carbon credits
Q9. Scope 3 emissions verification/assurance status:
Incomplete third-party v/a: last year’s statement available
Incomplete third-party v/a: first year it has taken place
Complete third-party v/aQ10. Engagement with elements in value chain
Suppliers
Customers
Other partners

15

Obs.

Mean

S.D.

Min

Max

899
827

2.16
2.15

0.89
0.88

1
1

3
3

941
941
941

0.59
0.04
0.29

0.49
0.20
0.45

0
0
0

1
1
1

941
941

0.09
0.62

0.28
0.49

0
0

1
1

941
941
941
941

0.34
0.15
0.45
0.25

0.47
0.36
0.50
0.43

0
0
0
0

1
1
1
1

941
941
941
941
941

0.13
0.24
0.25
0.56
0.76

0.33
0.43
0.43
0.50
0.43

0
0
0
0
0

1
1
1
1
1

917
917
911

0.20
0.8
0.14

0.40
0.27
0.34

0
0
0

1
1
1

849
849
849

0.29
0.27
0.20

0.17
0.16
0.40

0
0
0

1
1
1

836
836
836

0.42
0.44
0.17

0.49
0.50
0.37

0
0
0

1
1
1

Table 2. Regression results of Questions 1 to 6

Q1. Group and Individual Responsibility:
Individual/sub-set of the board
Other manager/officer
Senior manager/officer
Q2. Risk management approach:Specific risk management process
Integrated risk management process
Q3. Engagement with policy makers
Direct engagement
Funding research organizations
Trade associations
Other
Q4. Emissions reduction target
Absolute and intensity targets
Absolute target
Intensity target
Q5. Goods/services enabling GHG emissions avoidance
Q6. Emissions reduction initiatives
Constant
Country dummy
Industry dummyobsyear
R-squared(1)
Risk awareness
Coef
S.E.

(2)
Opportunity awareness
Coef
S.E.

0.177
−0.0740.028(0.114)(0.159)(0.109)0.341***−0.2270.101(0.130)(0.179)(0.127)0.145
0.307***(0.103)(0.074)0.109
0.187**(0.107)(0.077)0.054
0.145*
0.227***
0.020(0.063)(0.083)(0.061)(0.061)0.142**
0.103
0.149**
0.106*(0.063)(0.081)(0.062)(0.061)0.252**
0.151*
0.167**
0.182***
0.320***
1.377(0.103)(0.079)(0.080)(0.062)(0.078)(0.116)
Yes
Yes
899
2013
0.369

0.270**
0.215**
0.227***
0.255***
0.163*
1.175(0.104)(0.083)(0.084)(0.063)(0.085)(0.135)
Yes
Yes
827
2013
0.375

Note: ***, **, and * stand for statistically significant levels at 1%, 5%, and 10%, respectively.

16

Table 3. Regression results of Questions 7 to 10

Q7. Emissions trading schemes:
Currently in participation
Anticipating to participate in 2 years
Q8. Originated/purchased carbon credits
Q9. Scope 3 emissions verification/assurance status:
Incomplete third-party v/a: last year’s statement available
Incomplete third-party v/a: first year it has taken place
Complete third-party v/aQ10. Engagement with elements in value chain
Suppliers
Customers
Other partners
Constant
Country dummy
Industry dummyObsYear
R-squared(1)
Risk awareness
Coef
S.E.

(2)
Opportunity awareness
Coef
S.E.

0.182**
0.090
0.191**(0.078)(0.106)(0.089)0.134**
0.138
0.222**(0.078)(0.109)(0.088)

0.238
0.178
0.354***(0.164)(0.167)(0.079)0.124
0.283**
0.232***(0.163)(0.162)(0.077)0.303*** (0.067)
0.272*** (0.060)
0.043(0.080)1.846(0.086)
Yes
Yes
788
2013
0.308

0.273***
0.175***
0.137**
1.778(0.067)(0.062)(0.079)(0.092)
Yes
Yes
743
2013
0.299

Note: ***, **, and * stand for statistically significant levels at 1%, 5%, and 10%, respectively.

[2015.11.5 1211]

17