By Heidi Blom
Insights into companies’ motivations to participate in voluntary climate actions
Companies are rational players and adapt their strategic plans and operation models intending to benefit from them. Their climate strategies combine their for-profit strategy and ethical values. This post explains some interesting results of my master thesis, which explores what motivates or drives companies into implementing climate actions and participating in voluntary climate actions and projects. Traditionally, it was thought that the for-profit operations and environmentally responsible actions were contradictory inconsistent. Nowadays they are increasingly thought to be possible to combine. However, the motive for including ethical notions in the strategic plans can be self-interest and companies might try to benefit through them. It is not unambiguous to differentiate the reasons behind.
The analysed companies in my thesis were selected from the Climate Partners project, directed by the City of Helsinki. The project describes itself “as a network for companies that want to be involved in making a Carbon Neutral Helsinki”. All participating companies are large companies operating in the Helsinki/capital region. I interviewed employees working with environmental issues from eight different companies. The interviewees in the thesis said that climate issues are trending in the business world. This surely is no surprise for anyone. According to the interviewees, companies need to take climate issues into consideration in their operations to ensure their scope of action in the future. The environmental and climate regulations become constantly tighter. This among other factors affects the market and is one of the reasons why the companies need to adapt and prepare for change in advance. Many of the seemingly voluntary climate actions are, in fact, preparations for the future securing continuing market position.
My analysis examines the motivations, drivers and barriers of climate actions and subdivides them into themes. Although my thesis brings up a variety of factors, I will here focus on the underlying motives/drivers for the networking of companies. This subject interests me particularly because I had not expected the results and also because the results might be valuable in terms of attracting companies to various voluntary projects and networks.
The main reasons mentioned in most interviews for companies to participate in different projects and networks is networking and a strong culture of cooperation. The Climate Partners project is one example of various voluntary networks companies take part in. The interest focused both in other companies and the city, but the importance of other companies was emphasized in the interviews. Several of the interviewees talked about networking and cooperation as a present-day manifestation and trend. Within the networks, companies sought for new ideas and benchmarking, among other things. The interviewees indicated that dropping out of voluntary networks is not really an option since they have become an integral part of the company operations and because other companies participate in them. When talking about the Climate Partners project, an interviewee representing an environmental maintenance company stated that companies in their sector are expected to be involved in such projects. It seems that much of the motivation for companies to be part of networks is because it’s trendy – that is to say, others do it as well.
Did companies seek contact with other companies, the city or both when joining the Climate Partners project? My thesis indicates that companies join voluntary projects and networks to ensure that they are not excluded when developing new solutions or ideas, or excluded from possible decision situations, which can arise in such projects or networks. Many of the decisions are these days made in networks, and solutions are often developed through cooperation. One interviewee brought up that solutions require cooperation and that networks like Climate Partners are currently trendy and they serve as starting points for solutions in the climate crisis.
Companies participate in various networks partly because other companies also participate in them. When talking about the Climate Partners project, an interviewee representing an environmental maintenance company stated that companies in their sector are expected to be involved in such projects. Several interviewees expressed that networking and other companies are an important part of their activities in the Climate Partners project. Contact with other companies was mentioned more often than contact with the city. However, during the interviews it was also mentioned that by joining the Climate Partners project the companies intended to create a stronger connection to the city. For example, some companies were identified as large players in the Helsinki city area which made it reasonable to join the project. The interest focused both in other companies and the city, but the importance of other companies was emphasized in the interviews.
One interviewee brought up the idea to tie some of the company’s lesser climate actions under city operations to avoid the wrong kind of publicity. The person expressed that this could be one of the reasons for the company to be involved in the Climate Partners project. There had been discussions within the company about compensating the emissions related to staff travel and how to inform publicly about it. The company feared that they might receive criticism and negative media attention, as the emissions related to staff travel were small compared to the company’s other emissions. The idea was that a number of companies could form a group and they would commit to compensate for the travel-related emissions of their staff. This way the number of employees covered by the emission reductions would be higher, as would the emission reductions achieved, which would make it more impressive in communication. The decision to compensate for staff travel emissions could be marketed as the city’s decision that the city would inform about. Communication risks would be transferred from companies to the city. In my view, this was an interesting idea of how emission reductions could be achieved through cooperation between companies and the city. On the other hand, it raises the question of whether it is actually more about communication than emission reduction.
Communicating about a company’s responsible operations is not risk-free. A company can receive criticism and suspicions from consumers when communicating its efforts for responsibility. This kind of negative publicity is detrimental to the company brand. In my opinion, it would therefore be interesting to take a closer look at the opportunities offered by various networks and projects to attract companies to implement the more communicatively risky emission reductions or emission compensations mentioned above.
In conclusion, the interviewed companies from the Climate Partners project expressed several reasons to join the Climate Partners project and also more generally other networks and projects. Networks were experienced as a trend of today and joined because other companies were in them as well and the companies did not want to be left out of possible opportunities for cooperation or decisions to be made there. Networks also provided companies opportunities for new ideas and benchmarking. Based on the results of my thesis, volunteer projects and networks appear to be attractive for companies. There seems to be potential for further development of operations within them, which were illustrated by the idea of one of the interviewees to tie risky communications for the company under the city’s operations. Joining the Climate Partners project is also seen to fit well a company’s ideology. Today’s perception is typically that a company’s for-profit activities are well-compatible with ethical values such as climate responsibility. I would like to end my blog post quoting an interviewee: “Climate change will be tackled together, which is why it is good to be involved in projects like this and it will also benefit the company in the long run.”
Heidi Blom has a Master’s degree from the University of Helsinki, majoring in environmental change and policy. Heidi has worked as a trainee at the Helsinki Institute of Sustainability Science (HELSUS) and is currently working as a project coordinator at the Research Centre for Ecological Change (REC). Her Master’s thesis can be read in Helda (thesis in Finnish).
References:
Altman, M. (2005). The ethical and competitive markets: Reconciling altruistic, moralistic, and ethical behavior with the rational economic agent and competitive markets. Journal of Economic Psychology, Vol. 26, 732-757.
Husted, B. W. ja Allen, D. B. (2000). Is It Ethical to Use Ethics as Strategy? Journal of Business Ethics, Vol. 27, 21-31.
Lantos, G. P. (2002). The ethicality of altruistic corporate social responsibility. Journal of Consumer Marketing, Vol. 19(3), 205-230.
Okereke, C. (2007). An Exploration of Motivations, Drivers and Barriers to Carbon Management: The UKFTSE 100. European Management Journal, Vol. 25(6), 475-486.
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