Authors: Derek D. Wang, Shanling Li, Toshiyuki Sueyoshi
Publication: Journal of Cleaner Production, Vol. 196, September 2018
To cope with climate change, a firm can employ a portfolio of heterogeneous mitigation technologies, including pollution control, eco-efficiency, green design, low-carbon energy, and management system, each with distinct operational and climate implications. In this paper, we study how management factors of a firm can shape the structure of its climate change mitigation technology portfolio. Based on a sample of 362 major firms in the United States for 2011–2013, we find delegating the responsibility of climate change to a position higher in firm hierarchy can promote the use of green design technology. The provision of monetary incentive to firm management contingent on climate change performance is positively associated with the portfolio size, and the use of pollution control and eco-efficiency technologies. Non-monetary incentive such as recognition is effective in stimulating the use of eco-efficiency technology. The firm's risk attitude towards climate change negatively affects the proportion of eco-efficiency technology in the portfolio. The results underscore that firms should take differential effects of management factors on technology portfolio into consideration when building the portfolio to attain desired economic and climate outcomes.