Abstract:
This study aims to theorise and foster a better understanding of the strategies
organisations adopt to respond to the risks and opportunities emerging from changing
government climate change policies and the supporting management accounting
adopted. Data include interviews and archival documents from five New Zealand
electricity generators. We construct a theoretical framework that links climate change
risks and opportunities to strategic responses. Climate change risk exposure increased
during the period due to changes in the estimation/perception of climate change risks,
market opportunities and regulatory uncertainty. Organisations' strategies changed in
response, moving from a stable strategy to different combinations of anticipatory,
proactive, and creative strategies, and finally regressing to a reactive strategy. Carbon
management accounting changed to support the new strategy adopted in each time
period. Long term physical and monetarised accounts for sustainability and extensive
use of carbon information were prevalent during periods when the companies
employed a proactive or creative strategy. In contrast, short-term physical accounts
for unsustainability and limited use in decision-making were observed when the
companies adopted stable, anticipatory or reactive strategies. Regulatory uncertainty
was found to be the major constraint to a proactive strategy and carbon management
accounting development in response to climate change.
