To adopt or not: the influence of institutional pressures on Science-Based Targets adoption

Abstract

The science-based targets (SBTs) are targets developed for companies that are both science-based (Paris Agreement as foundation) and absolute (limit CO2 emissions to stay well-below 2 degrees Celsius). The current Science-Based Targets (SBTs) focus on reducing CO2 emissions, with the future ones also including biodiversity, water, oceans, and land. To mitigate climate change, it is important that as many companies as possible adopt such targets. To that end, this research answers the question which pressures influence companies to adopt science-based targets and how. By using an extended version of institutional theory, four pressure categories are found, comprised of coercive, mimetic, normative and internal. These four pressure types are exerted by their respective primary stakeholders. To find the answer to the research question, three methods are used. These are qualitative interviews, a content analysis, and a survey. The findings show that market and internal pressures work in conjunction with social and coercive pressures to create industry-wide movements towards more sustainable practices, among which SBTs adoption. Most notable are shareholder internal pressures who have developed a strong interest in the sustainability performance of the companies they invest in. Future research could focus on the impact of shareholder on climate target achievement as well as how shareholders and other stakeholders can cooperate to strengthen each other.