Climate Change Denial and Corporate Environmental Responsibility

Mansoor Afzali, Gonul Colak, Sami Vähämaa*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper examines whether corporate environmental responsibility is influenced by regional differences in climate change denial. While there is an overwhelming consensus among scientists that climate change is happening, recent surveys still indicate widespread climate change denial across societies. Given that corporate activity causing climate change is fundamentally rooted in individual beliefs and societal institutions, we examine whether local perceptions about climate change matter for firms’ engagement in environmental responsibility. We use climate change perception surveys conducted in the U.S. to compute a novel measure of climate change denial for each U.S. county. We find that firms located in counties with higher levels of climate change denial have weaker environmental performance ratings, are more likely to commit environmental violations, and impose greater environmental costs on society. Regional differences in religiosity, social capital, political leaning, or county-level demographic characteristics cannot explain these results. Furthermore, we document that strong corporate governance mechanisms and corporate culture moderate the negative relationship between climate change denial and corporate environmental responsibility. Overall, our findings offer new insights into how local beliefs and perceptions about climate change may influence firm-level sustainability practices.
Original languageEnglish
Peer-reviewed scientific journalJournal of Business Ethics
ISSN0167-4544
Publication statusAccepted/In press - 16.01.2024
MoE publication typeA1 Journal article - refereed

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance

Cite this