Corporate leaders and climate action

The last decade has seen a change in the perceptions of the general public, policymakers, researchers, and corporate leaders regarding the purpose of business firms. In the wake of this, there is tremendous expectation that for-profit companies should do more to address the climate crisis we face and lead the way in adopting practices that improve the health of our planet.  

Some companies have indeed become invested in improving their Environmental, Social, Governance (ESG) scores. They have focused on actions ranging from anchoring ESG explicitly in their corporate governance, to the implementation of circular solutions to reduce environmental pollution.  

However, many others - from Barclays to BP - have been alleged to have resorted to greenwashing (where an organisation makes false or misleading claims about the environmental benefits of its products or services) to maintain a favourable image, and still others such as Chemours, DuPont, and Tyson Foods continue to risk lawsuits for acts detrimental to the environment.  

It is against this backdrop that the European Union’s Corporate Sustainability Reporting Directive (CSRD), which both obliges and facilitates sustainability-related reporting by companies, went into effect in January 2023.  

It remains to be seen, though, how influential the CSRD will prove to be in promoting broader commitment by companies to tackling climate change.  

A key element in this context, which has received scarce attention from researchers and policymakers, is the ability and will of corporate leaders to commit their enterprises to comprehensive and timely climate-positive pathways to improved financial performance and value creation. In companies, corporate leaders, namely the executive and non-executive directors, constitute the most influential and powerful group having the authority and responsibility for setting goals and strategies. They, collectively, establish priorities, allocate resources, and rationalize their choices to internal and external stakeholders.  

Research shows that corporate leaders’ decisions are shaped by their education, personalities, and values, as well as the relationships they have with others in top management teams and the corporate board. In light of this, it is reasonable to expect that corporate leaders would have a significant influence on climate action or inaction decisions in companies.  

However, in the absence of well-supported theories and relevant data to test theoretical models, we do not have research-based evidence for the effects of education, personalities, and values of corporate leaders on companies’ climate-related conduct. Studying this is crucial though, as social and regulatory pressure on companies increases to do more.  

Our research aims to address this gap by exploring how corporate leaders’ education, personalities, and values affect their companies’ climate-related actions. Initial work includes reviewing existing research, consulting experts, interviewing corporate leaders, followed by data analysis.  

Research centring on corporate leaders has the potential to provide valuable insights that inform practice (such as helping to identify rewards and penalties that boards might use to try encourage executives to make climate-positive choices) and policy (by, for example, identifying the challenges and solutions for effective corporate engagement with initiatives such as the EU’s CSRD).  

Visit the project webpage. 

This project is funded by Leeds University Business School’s Climate Change and Environmental Research Fund.