Corporate strategies in response to climate change : a complexity based study of Australian businesses from the high emission industries

Climate change has become a key issue in this century requiring global efforts to mitigate greenhouse gas emissions. It has been described as a ‘super wicked problem’ as we are running out of time; the solution is unfortunately dependent on the same people who cause the issue in the first place; there is no central authority; and finally, policy makers all over the world are dominated by a short-term focus. In the climate change debate businesses are recognised as the prime sources of emissions and also as the entities capable of bringing to market innovative solutions to combat climate change. The aim of this research, which is designed as a qualitative study, is to contribute to the advancement of knowledge on the corporate strategies undertaken by Australian businesses from the high emission industries in response to climate change, utilising concepts from complexity theory. The sample used in this research consists of 17 businesses from the high emission industries of coal, oil and gas, electricity, metals and minerals and chemicals. The data was collected in 2012 / 13 just prior to and during the introduction of carbon legislation in Australia. This provided a unique opportunity of studying business responses to climate change while subjected to the carbon legislation. This research is designed to address seven questions which investigate (1) the conditions in the internal environment of the businesses; (2) the dynamism and the emergence in the external business environment; (3) the forces from the internal and external environments which impact on business responses to climate change; (4) the strategies used by businesses in response to climate change; (5) the similarities and differences between the strategies of the businesses and industries (6) the adequacy of business responses to climate change; and lastly, (7) how businesses select their strategies in response to climate change. To achieve the aim of this research, this thesis takes a ‘big picture’ view of the business environment in which the businesses operate. Complexity theory is utilised to study business responses to climate change in the face of uncertainties and complexities in the business environment. The complexity concepts of initial conditions, dynamism, emergence, attractors and self-organisation (IDEAS) are used in the theoretical framework developed to analyse the data. The self-organised business actions are studied in relation to the forces of attraction emanating from the initial conditions present in the internal environments of the businesses, and the dynamism and the emerging changes present in the external business environment, to understand how businesses are responding to climate change. Following the principles of complexity theory, this research does not seek to provide prescriptive solutions. The research attempts to interpretatively analyse the business responses to climate change within the complexities evident in the internal and external business environments in an attempt to unravel the webs of causation. The research finds that the businesses were negotiating between simultaneous stability and instability resulting in four major paths of strategy selection, namely, the paths of strategic resistance, strategic response, strategic choice and strategic opportunism as depicted in the IDEAS strategy selection process model. Models representing the range of detracting and reinforcing forces emanating from the initial conditions, dynamism and emergence in the business environment in the context of climate change that simultaneously impact on businesses have been developed in this research to illustrate the webs of causation influencing and impacting business responses to climate change. Despite the range of activities businesses engaged in response to climate change, it was found that there was no reduction in total emissions with the main reasons cited as growth of the business, lack of technological solutions and lack of low emission energy sources equivalent to coal. The findings were interpretatively analysed to propose that holistic measures requiring the coming together of all sectors of society is necessary to address climate change