Category Archives: Sustainability

Explaining the Location of Mission-Driven Businesses: An Examination of B-Corps

Hickman, Leila; Byrd, John; Hickman, Kent
Journal of Corporate Citizenship, Volume 2014, Number 55

In his well-known essay, Milton Friedman (1970) argued that it is the social responsibility of business to maximize profit. While such laissez-faire reasoning theoretically considers the welfare of all the stakeholders in the business enterprise through market pricing mechanisms, there is a growing and pressing concern with market failures. Among these failures are externalities, issues of inter-generational equity and short-termism, the commons problem, and decision making biases. The ramifications of these market imperfections have manifested themselves in climate change, financial crises, and deforestation, among other global challenges. Some businesses have responded by refocusing their mission away from solely profit maximisation to broader, more sustainable goals. In this paper, we explore the factors that contribute to businesses adopting one such innovation, the B-Corporation designation.

Let’s talk: an analysis of the “vote vs. negotiated withdrawal” decision for social activist environmental health shareholder resolutions

John Byrd, Elizabeth S Cooperman
Journal of Sustainable Finance & Investment, Volume 4 Issue 3, July 2014, Pages 230-248

Social and environmental shareholder activists engage in a form of corporate social governance by submitting proxy resolutions for a specific change in corporate behavior deemed to be harmful to society. Using a unique data-set for environmental health shareholder resolutions filed by shareholder activists at 70 different companies during 2006–2011, we examine the success rate of resolutions and characteristics affecting the “vote vs. negotiated withdrawal” decision. Supporting a self-interest hypothesis, resolutions …

Determinants of corporate carbon reduction targets

John Byrd, Elizabeth S Cooperman, Ken Bettenhausen
Interdisciplinary Environmental Review, Volume 15 Issue 4, January 2014, Pages 271-289

This paper examines attributes affecting a corporation’s choice of an intensity-only (carbon emissions relative to sales, production, etc.) versus an absolute carbon dioxide (CO 2) emissions goal. We investigate alternative hypotheses for this choice including: 1) a high growth hypothesis whereby high growth companies select an intensity goal, to continue to grow without an absolute emission reduction; 2) a high emissions industrial sector hypothesis where firms in high CO 2 emission industries prefer an intensity goal that is …

Context-Based Sustainability and Corporate CO2 Reduction Targets: Are Companies Moving Fast Enough?

John W Byrd, Ken Bettenhausen, Elizabeth S Cooperman
International Review of Accounting, Banking, and Finance, Volume 5 Issue 3/4, Fall/Winter 2013, pp. 87-104.

Corporate sustainability activities are often ad hoc; that is, the extent to which a company moves toward being more sustainable is based on organizational feasibility or economic acceptance rather than true sustainability criteria. This paper examines corporate climate and carbon policy through the lens of context-based sustainability (CBS). CBS argues that true sustainable efforts must consider the ecological capacity of the environment and the fair allocation of this capacity. Only by doing so will the result be an outcome of a livable and sustainable world. The paper combines aspects of physical science (atmospheric CO2 carrying capacity) and philosophy (inter-generational equity and resource allocation) with corporate policy. When applied to climate change this implies examining corporate efforts relative to climate stabilization paths and further examining what a fair allocation of future emissions would be. We look at the documented carbon reductions for a sample of large US corporations including EPA Climate Leadership Award Winners in 2012 and a larger sample of companies from the same industries and compare their carbon reductions to several allocations of the global carbon budget required to limit climate change to just 1°C or 2°C. We find that the emissions path of these US corporations only satisfies the most generous, business-as-usual allocation of carbon emissions.

The Greening of Finance: A Brief Overview.

Elizabeth S Cooperman
International Review of Accounting, Banking & Finance, Volume 5 Issue 1, March 2013, Pp. 47-65.

This paper provides a brief overview of some of the sustainability developments that companies and non-profit groups have undertaken in the finance area including sustainability in banking, venture capital and investment companies, and integration of sustainability as part of corporate social responsibility by large and small companies. Although in practice by many corporations have taken on a more social and environmental focus in terms of sustainable finance and accounting efforts, the field of finance generally …

Do Shareholder Proposals Affect Corporate Climate Change Reporting and Policies?

Byrd, John and Cooperman, Elizabeth
International Review of Accounting, Banking & Finance, Volume 4 Issue 2, pp. 100-126

This study examines the effect of shareholder proxy proposals on climate change issues, using a sample of climate change resolutions submitted to U.S. corporations during 2007 to 2009. We test the hypothesis that shareholder climate-change proposals are effective in getting firms to engage in future actions. We examine differences in future actions based on company responses including: (1) SEC exclusion; (2) negotiation and withdrawal; and (3) proxy proposals voted on, and the percentage of vote received on proposal measures. We find evidence of future actions taken for climate change in response to resolutions, although actions can be relatively minor compared to proposal requests. Future actions occur more often for proposals with negotiated withdrawals. For proposals taken to vote, action occurs more often with a shareholder vote of 20 percent or higher. Extractive industry firms are also shown to be more reluctant to engage in climate change actions versus firms in non-extractive industries.

A Simple Path to Sustainability: Green Business Strategies for Small and Medium-sized Businesses

Andreas, Frederick, Elizabeth S. Cooperman, Blair Gifford, and Graham Russell, eds.
ABC-CLIO, 2011.

Simple Path to Sustainability: Green Business Strategies for Small and Medium-Sized Businesses is designed specifically to help smaller enterprises share in the benefits that flow from sustainability. Built around case histories showcasing 12 small to medium-size enterprises (SMEs) that have outstanding records of sustainability, this unique, hands-on guide will help readers choose and develop sustainability strategies and undertake the marketing and management initiatives necessary for success.

The studies collected here detail each company’s journey from initial idea through building a new culture, engaging stakeholders, gaining competitive advantage, and planning for the future. Each study also covers the challenges encountered, successes and failures, and lessons learned. Cases are centered around distinct themes, including a marketing/public relations perspective, a risk management perspective, an organizational culture perspective, and a new product development perspective. Taken as a whole, these stories do more than inform. They will inspire managers to become green entrepreneurs, undertaking sustainable strategies that can reap surprising benefits.

A Simple Path to Sustainability: Green Business Strategies for Small and Medium-Sized Businesses

Fred M. Andreas, Elizabeth S. Cooperman, Blair Gifford, and Graham Russell
ABC-CLIO, Praeger Publications, 2011
A Simple Path to Sustainability: Green Business Strategies for Small and Medium-Sized Businesses is designed specifically to help smaller enterprises share in the benefits that flow from sustainability. Built around case histories showcasing 12 small to medium-size enterprises (SMEs) that have outstanding records of sustainability, this unique, hands-on guide will help readers choose and develop sustainability strategies and undertake the marketing and management initiatives necessary for success.

The studies collected here detail each company’s journey from initial idea through building a new culture, engaging stakeholders, gaining competitive advantage, and planning for the future. Each study also covers the challenges encountered, successes and failures, and lessons learned. Cases are centered around distinct themes, including a marketing/public relations perspective, a risk management perspective, an organizational culture perspective, and a new product development perspective. Taken as a whole, these stories do more than inform. They will inspire managers to become green entrepreneurs, undertaking sustainable strategies that can reap surprising benefits.

Environmental Risk and Shareholder Returns: Evidence from the Announcement of the Toxic 100 Index

Kenneth Bettenhausen, John Byrd, and Elizabeth S. Cooperman
International Review of Accounting, Banking and Finance, Volume 2, Issue 3, pp. 28~45

This paper examines the stock price response to the announcement that a U.S. company has been named to the Toxic 100 list of the largest air polluters, where rankings are based on data from the Environmental Protection Agency’s (EPA) Risk Screening Environmental Indicator (RSEI) project. We find a significant negative average abnormal return (AR) of – 1.20% in 2006 and – 1.60 % in 2008 over the two – day announcement periods for the Toxic 100 announcements, representing an average drop in market value for the average firm in the index of – $235,944,909 in 2006 and – $237,595,885 in 2008.  Firms in the top 10 ranking of the index had a significantly, larger negative abnormal return than in the bottom 10 ranking. Firms that were not on the 2006 index, but were added to the 2008 index experienced an average abnormal return of -3.5%. The results are interesting for two reasons. One, they show that investors impound environmental risk into their company valuations, implying that environmental disclosure and reporting is important. Two, the results suggest that although analysts had the RSEI data prior to the release of the Toxic 100 lists, they view the Toxic 100 as a significant event. This suggests limits to the semi-strong form of market efficiency, suggesting that the anticipated payoff from computing their own environmental risk assessment may not justify their time and effort required to do so.