Carbon Disclosure Project (CDP) results as a managerial tool to meet stakeholder expectations in retail businesses operating in Finland

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Journal Title
Journal ISSN
Volume Title
School of Business | Master's thesis
Date
2022
Major/Subject
Mcode
Degree programme
Management and International Business (MIB)
Language
en
Pages
73
Series
Abstract
Sustainability as a current megatrend has led companies to increasingly take action to mitigate climate change. Especially large companies operating in the European market have defined their sustainability strategies, which include climate change mitigation targets. Because of this, voluntary sustainability reporting has become very popular. There are numerous ways for companies to communicate their sustainability agenda, including annual reviews, sustainability reports, participating into sustainability rankings, and following strict sustainability standards. One of such voluntary methods is disclosing climate change mitigation information to Carbon Disclosure Project (CDP), which assesses companies’ climate performance in different areas and thus, rates them based on it. CDP has become one of the most popular voluntary sustainability reporting activities over the years, particularly among publicly listed companies. This is due to the fact that the CDP report is mostly targeted for investors. Although the CDP report is comprehensive and data-heavy, it gives the audience a good overview of the company’s current climate actions. As companies who do not yet have their net zero strategy in place are seen as a risky business, companies want to voluntarily participate in the CDP reporting and assumably, aim for high scores. However, also other than publicly listed companies are now participating in the CDP reporting, and therefore this research aims to answer the following question: How do CDP results drive climate change mitigation within international retail companies operating in Finland? The study was conducted as qualitative research with three retail businesses operating in Finland. Two of these companies are publicly listed, whereas one of them is not. These companies were studied by collecting primary data through semi-structured interviews. Also, secondary data was collected from publicly available webinars published by external organisations. The data was analysed using thematic analysis, and it discovered various themes in which CDP results are used within the studied companies. The most popular themes are SBT, benchmarking, shareholder expectations and internal communications. However, these themes are not drivers for climate change mitigation activities, but more for voluntary CDP reporting. The findings thus suggest that CDP is not used as a tool to accelerate climate change mitigation, but to meet stakeholder expectations. The most interesting finding was that the studied companies prefer focusing on science-based targets as a tool to guide them in such actions. The study thus suggests that the companies operating in the scope of this study are more interested in reducing greenhouse gas emissions in effective way, rather than purely aiming for good sustainability reputation received from voluntary sustainability reports or rankings, like CDP. As a result, this study contributes to a limited scholarly understanding of motives behind voluntary sustainability reporting and provides additional insight to sustainability managers thinking of participating in CDP.
Description
Thesis advisor
Peixoto, Inês
Keywords
voluntary reporting, sustainability, science based targets, carbon disclosure project, climate change mitigation
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