Carbon reduction and energy transition targets of the largest European companies: An empirical study based on institutional theory

Abstract

Climate change mitigation is at the core of the preoccupations of governments worldwide. The main research gap is that little is known about a powerful tool used by corporations to address climate change, namely carbon reduction and energy transition targets. In the official statistics, companies are designated as the biggest polluters. The purpose of this research is to investigate the targets set by the largest European companies and their achievement status regarding the carbon reduction and energy transition process. Target setting was analyzed by reference to the pressures hypothesized by the institutional theory. To answer the research question, the targets set by the companies included in the STOXX All Europe 100 Index were extracted from various sources. Hypothesis testing was conducted on the existence of mimetic, coercive, and normative isomorphism. A new scoring system was proposed to measure the level of corporate commitment regarding carbon reduction and energy transition targets. The findings suggest that most targets are established for the short and medium term and refer to absolute emissions, some of them already achieved. All forms of isomorphism apply to the selected sample. The research has implications for policy setting, as relaxed targets may lead to greenwashing and prevent countries from meeting international strategic goals.