Conceptual model for corporate climate change strategy development: Empirical evidence from the energy sector

This paper proposes a conceptual model for corporate climate change strategy development. It reflects the dynamic influence of climate change risks and stakeholder pressures on carbon management practices adopted and the performance perception of managers. We draw our model on resource dependence theory to explain how managers apply carbon management practices to reduce ecological uncertainty caused by firms’ direct dependence on nature. Using institutional theory, we describe how stakeholders influence firm reactions to climate change. We test a structural equation model and run a cluster analysis of 105 Brazilian energy firms. The results show that companies undertake one of four different strategies ranging from a minimalist approach to the regulation shaper, pressure manager or greenhouse gas emission avoiders. The proposed model contributes to an understanding of the importance of embedding climate change in a business model in emerging markets.