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Scaling laws in global corporations as a benchmarking approach to assess environmental performance

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Listed:
  • Rossana Mastrandrea
  • Rob ter Burg
  • Yuli Shan
  • Klaus Hubacek
  • Franco Ruzzenenti

Abstract

The largest 6,529 international corporations are accountable for almost 30% of global CO2e emissions. A growing awareness of the role of the corporate world in the path toward sustainability has led many shareholders and stakeholders to pursue increasingly stringent and ambitious environmental goals. However, how to assess the corporate environmental performance objectively and efficiently remains an open question. This study reveals underlying dynamics and structures that can be used to construct a unified quantitative picture of the environmental impact of companies. This study shows that the environmental impact (metabolism) of companies CO2e energy used, water withdrawal and waste production, scales with their size according to a simple power law which is often sublinear, and can be used to derive a sector-specific, size-dependent benchmark to asses unambiguously a company's environmental performance. Enforcing such a benchmark would potentially result in a 15% emissions reduction, but a fair and effective environmental policy should consider the size of the corporation and the super or sublinear nature of the scaling relationship

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  • Rossana Mastrandrea & Rob ter Burg & Yuli Shan & Klaus Hubacek & Franco Ruzzenenti, 2022. "Scaling laws in global corporations as a benchmarking approach to assess environmental performance," Papers 2206.03148, arXiv.org, revised Jul 2023.
    • Handle: RePEc:arx:papers:2206.03148
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    References listed on IDEAS

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