Speaker: Brandon Kraft, PhD Exchange Scholar from Cornell University
As climate science evolves, stakeholders want information about how climate change will affect operations and what corporations are doing to mitigate future climate impacts. Extant theory posits that corporations disclose environmental information to manage stakeholders’ impressions, attempting to maintain economic and legitimacy resources. These studies generally find that corporations prioritize the maintenance of economic resources when formulating their disclosure strategies. In discussing these findings, scholars assume competitive market structures. Many polluting industries, however, do not operate in competitive markets. Accordingly, current assumptions of competitiveness obscure potential explanations of variation in environmental disclosure. I argue this is a salient oversight given the importance scholars place on economic motivations to explain disclosure strategy. To remedy this oversight, I investigate how Investor Owned Utilities vary the materiality of their climate disclosures to mediate relationships with legislators, social movements, and shareholders within a regulated market. I find that an IOU’s embeddedness in the state legislative process and that social movement activities lead to increases in disclosure materiality. I argue these findings demonstrate IOUs priorities to assuage legislative scrutiny and maintain perceptions of legitimacy. Interestingly in this regulated market, shareholder pressures do not lead to variation in disclosure materiality. I argue that these findings demonstrate that market structures influence corporations’ perceptions of stakeholder power and, by extension, their environmental disclosure strategies.