IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v174y2023ics0301421523000472.html
   My bibliography  Save this article

What they say, what they do and how they do it: An evaluation of the energy transition and GHG emissions of electricity companies

Author

Listed:
  • Maia, Rodrigo Gomes Távora
  • Garcia, Katia Cristina

Abstract

The electricity sector is a critical player in combating climate change through the energy transition. Therefore, companies in the sector should align their policies and actions with the world's major environmental movements, such as the Sustainable Development Goals (SDGs) and Paris Agreement. This paper assesses the energy transition and GHG emissions mitigation by the electricity sector using Paris Agreement targets and evaluates the impact of SDGs and science-based targets adoption on their decarbonization. From 2017 to 2019, we evaluated 39 global electricity companies using their sustainability reports and the Science Based Targets initiative (SBTi) based on Paris Agreement global warming scenarios of 1.5 °C and well-below 2 °C (WB2°C). We discovered that all companies prioritize climate change actions, with 87% linking these actions to at least one SDG. When analyzing whether GHG emission reductions were in line with either Paris Agreement scenario, this figure dropped to 51%. Companies with SBTi met the 1.5 °C and WB2°C targets at a rate of 92% compared to 32% of companies without SBTi. We concluded that SDG adoption had no effect on mitigation results and that companies with SBTi performed significantly better in terms of emissions reduction and transition to renewables, although there was no proof of causality. These findings can help with the adoption of more effective policies for the implementation of SDGs and their prioritization in the sector, as well as encourage emission targets based on consolidated methodologies to guide companies' actions.

Suggested Citation

  • Maia, Rodrigo Gomes Távora & Garcia, Katia Cristina, 2023. "What they say, what they do and how they do it: An evaluation of the energy transition and GHG emissions of electricity companies," Energy Policy, Elsevier, vol. 174(C).
    • Handle: RePEc:eee:enepol:v:174:y:2023:i:c:s0301421523000472
    DOI: 10.1016/j.enpol.2023.113462
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421523000472
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2023.113462?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gustavo Pineiro-Villaverde & María Teresa García-Álvarez, 2022. "Impact of Clean Energy Policies on Electricity Sector Carbon Emissions in the EU-28," Energies, MDPI, vol. 15(3), pages 1-14, January.
    2. Joachim H. Spangenberg, 2017. "Hot Air or Comprehensive Progress? A Critical Assessment of the SDGs," Sustainable Development, John Wiley & Sons, Ltd., vol. 25(4), pages 311-321, July.
    3. Jayme Walenta, 2020. "Climate risk assessments and science‐based targets: A review of emerging private sector climate action tools," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 11(2), March.
    4. Pedro Cabral Santiago Faria & Nicole Labutong, 2019. "A description of four science-based corporate GHG target-setting methods," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 11(3), pages 591-612, June.
    5. Asane-Otoo, Emmanuel, 2016. "Competition policies and environmental quality: Empirical analysis of the electricity sector in OECD countries," Energy Policy, Elsevier, vol. 95(C), pages 212-223.
    6. Pedro Cabral Santiago Faria & Nicole Labutong, 2019. "A description of four science-based corporate GHG target-setting methods," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 11(3), pages 591-612, June.
    7. Frederik Dahlmann & Layla Branicki & Stephen Brammer, 2019. "Managing Carbon Aspirations: The Influence of Corporate Climate Change Targets on Environmental Performance," Journal of Business Ethics, Springer, vol. 158(1), pages 1-24, August.
    8. Ronald S. Burt & Sonja Opper, 2020. "Political Connection and Disconnection: Still a Success Factor for Chinese Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 44(6), pages 1199-1228, November.
    9. Wang, Derek D. & Sueyoshi, Toshiyuki, 2018. "Climate change mitigation targets set by global firms: Overview and implications for renewable energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 386-398.
    10. Jannik Giesekam & Jonathan Norman & Alice Garvey & Sam Betts-Davies, 2021. "Science-Based Targets: On Target?," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ivan Ruiz Manuel & Kornelis Blok, 2023. "Quantitative evaluation of large corporate climate action initiatives shows mixed progress in their first half-decade," Nature Communications, Nature, vol. 14(1), pages 1-15, December.
    2. David Bendig & Andreas Wagner & Kevin Lau, 2023. "Does it pay to be science‐based green? The impact of science‐based emission‐reduction targets on corporate financial performance," Journal of Industrial Ecology, Yale University, vol. 27(1), pages 125-140, February.
    3. Zola Berger‐Schmitz & Douglas George & Cameron Hindal & Richard Perkins & Maria Travaille, 2023. "What explains firms' net zero adoption, strategy and response?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5583-5601, December.
    4. Matthew P. Johnson & Theresa S. Rötzel & Brigitte Frank, 2023. "Beyond conventional corporate responses to climate change towards deep decarbonization: a systematic literature review," Management Review Quarterly, Springer, vol. 73(2), pages 921-954, June.
    5. Maida Hadziosmanovic & Shannon M. Lloyd & Anders Bjørn & Raymond L. Paquin & Nadine Mengis & H. Damon Matthews, 2022. "Using cumulative carbon budgets and corporate carbon disclosure to inform ambitious corporate emissions targets and long‐term mitigation pathways," Journal of Industrial Ecology, Yale University, vol. 26(5), pages 1747-1759, October.
    6. David Coen & Kyle Herman & Tom Pegram, 2022. "Are corporate climate efforts genuine? An empirical analysis of the climate ‘talk–walk’ hypothesis," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3040-3059, November.
    7. Wakiyama, Takako & Zusman, Eric, 2021. "The impact of electricity market reform and subnational climate policy on carbon dioxide emissions across the United States: A path analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    8. Wullianallur Raghupathi & Dominik Molitor & Viju Raghupathi & Aditya Saharia, 2023. "Identifying Key Issues in Climate Change Litigation: A Machine Learning Text Analytic Approach," Sustainability, MDPI, vol. 15(23), pages 1-30, December.
    9. Hametner, Markus, 2022. "Economics without ecology: How the SDGs fail to align socioeconomic development with environmental sustainability," Ecological Economics, Elsevier, vol. 199(C).
    10. Douglas A. Adu & Antoinette Flynn & Colette Grey, 2022. "Executive compensation and sustainable business practices: The moderating role of sustainability‐based compensation," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 698-736, March.
    11. Chung-Hao Chang & Shih-Fang Lo, 2022. "Impact Analysis of a National and Corporate Carbon Emission Reduction Target on Renewable Electricity Use: A Review," Energies, MDPI, vol. 15(5), pages 1-18, February.
    12. Chiara Mio & Silvia Panfilo & Benedetta Blundo, 2020. "Sustainable development goals and the strategic role of business: A systematic literature review," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3220-3245, December.
    13. Bastianin, Andrea & Castelnovo, Paolo & Florio, Massimo, 2018. "Evaluating regulatory reform of network industries: a survey of empirical models based on categorical proxies," Utilities Policy, Elsevier, vol. 55(C), pages 115-128.
    14. Mengyao Xia & Bangzhu Zhu & Helen Huifen Cai, 2023. "Does duration of team governance decrease corporate carbon emission intensity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1363-1388, May.
    15. Lukas Benz & Stefan Paulus & Julia Scherer & Janik Syryca & Stefan Trück, 2021. "Investors' carbon risk exposure and their potential for shareholder engagement," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 282-301, January.
    16. Sarah Cummings & Anastasia‐Alithia Seferiadis & Leah de Haan, 2020. "Getting down to business? Critical discourse analysis of perspectives on the private sector in sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(4), pages 759-771, July.
    17. Sæther, Simen Rostad, 2021. "Climate policy choices: An empirical study of the effects on the OECD and BRICS power sector emission intensity," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 499-515.
    18. Mariia Kostetckaia & Markus Hametner, 2022. "How Sustainable Development Goals interlinkages influence European Union countries’ progress towards the 2030 Agenda," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 916-926, October.
    19. Weber, Heloise & Weber, Martin, 2020. "When means of implementation meet Ecological Modernization Theory: A critical frame for thinking about the Sustainable Development Goals initiative," World Development, Elsevier, vol. 136(C).
    20. Xuantong Wang & James Hopeward & Ilcheong Yi & Mark W. McElroy & Paul C. Sutton, 2022. "Supporting the Sustainable Development Goals: A context sensitive indicator for sustainable use of water at the facility level," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 1184-1199, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:174:y:2023:i:c:s0301421523000472. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.