Transformative drivers of environmental sustainability in contemporary organizations [2017-2020]

Seventy-one percent of global emissions are attributed to just 100 companies, which are all from the fossil fuel sector. The world’s current trajectory of exponential population growth is yielding widespread environmental degradation, highlighting the need for transformation in the usual business models and substantial action towards environmentally responsible initiatives. For global collaboration on combatting climate change, the United Nations introduced international climate treaties, the most recent and notable example being the Paris Agreement, which aims to keep the global temperature rise below 2℃, and ideally within 1.5℃ relative to pre-industrial levels. Using a bottom-up approach, this research explores the emissions reduction efforts of for-profit companies. Towards this end, it draws upon extensive datasets for the 2017-2020 period from the Carbon Disclosure Project, on over 100 large corporations across eleven industries in the U.S. and Europe. It aims to address whether the Kyoto Protocol and Paris Agreement may have influenced corporate strategy, which in turn would affect changes in corporate governance, risk management, and targets and performance, thereby translating to lowered emissions and/or energy intensity reductions. Additionally, a modified version of the IPAT model is applied at the corporate level to assess drivers of environmental impact, which helps identify areas needing change. The IPAT also helps track changes in emissions, revenue, and use of renewable versus non-renewable energy in these 100+ corporations, both before and after the COVID-19 pandemic came into play. The thesis found that over the four-year period of 2017-2020, these 102 European and U.S. companies represented 5.5% of the 2021 global CO2 emissions. For both regions, the highest-emitting industries are in exactly the same order: Power Generation, Airlines, and Fossil Fuels. In the three-year period of 2017-2019, prior to COVID-19, emissions dropped in both regions and most sectors due to a joint improvement in energy and carbon efficiency. Moreover, the pandemic’s impact in 2020 was just as significant as that of technology’s impact over three years. A notable finding was that COVID-19 lockdowns reduced emissions significantly more in the U.S. than policies and business strategies could before the pandemic year of 2020. Interestingly, the research also saw that emissions can be reduced with increasing revenue and possible profitability, depending on cost increases. This thesis demonstrates that corporations in advanced industrialized nations have the potential to play an instrumental role in reducing emissions through improving both energy and carbon efficiency, and by making robust efforts. These corporations can set an example for their counterparts in developing nations, proving that it is possible to reduce emissions while increasing revenue. Ultimately, this can create a pathway toward stabilizing climate change.