Quantifying corporate climate commitments
Master of Environmental Studies graduate Meijie Lin’s research separates symbolic changes from substantive action.
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Corporations are major contributors to climate change and are under increasing pressure to disclose and reduce their carbon emissions. While many organizations claim to be decarbonizing their operations, it is difficult to differentiate between substantive effort and symbolic actions. There has been little research on how carbon mitigation outcomes can be quantitatively attributed to substantial versus symbolic actions, which can make it difficult to identify those companies that genuinely contribute to mitigating climate change and those that do not. This knowledge gap in corporate sustainability was the focus of Meijie Lin's master’s research.
Lin, a recent graduate from the School of Environment, Enterprise and Development, joined the Faculty of Environment with both education and work experience in the financial accounting industry. She wanted to pursue academic research in sustainability after she began working within the climate change department of a large consulting firm. Working with her supervisor, Dr. Jeffrey Wilson, Lin evaluated how changes in emissions are driven by different factors, and to what extent these changes can be attributed to substantive decarbonization actions as opposed to unintended external influences.
Lin’s evaluation was conducted using carbon-related data from 281 companies listed on the Hong Kong Stock Exchange. Changes in carbon emissions from 2018 to 2023 were calculated and attributed to three different driving factors: carbon intensity (the amount of carbon emitted with the energy mix), energy intensity (the amount of energy needed to generate revenue) and revenue. These factors identified which firms saw decreases in emissions due to ideal reasons, like renewable energy adoption and significant energy efficiency improvement, in comparison to those that saw decreases due to revenue decline or changes in calculation methodologies.
The results showed 47% of companies saw a reduction in emissions. However, as much as 40% of those companies also experienced revenue declines, which makes the emission reductions less attributable to decarbonization actions. An action score was calculated through a model developed by this study to reflect the extent of their decarbonization through deliberate actions, and only around 20% of emission changes could be attributed to substantive decarbonization actions.
The percentage of substantive change may seem low, but this value was expected by Lin. “What is more important is to make users and decision-makers of corporate sustainability reporting aware of the nuances behind year-over-year changes in emissions and the multiple factors at play in emission reductions. Understanding the drivers of real emission changes is key at differentiating corporate sustainability performance.”
Lin now works at Manulife as a Specialist in Sustainability Reporting & Disclosure, where she plays a crucial role in the preparation, management, governance and delivery of sustainability reports and disclosures. Her time in the SUSM program has equipped her to better synthesize complex information, draw meaningful connections, and present nuanced findings, which are invaluable skills in the multidisciplinary field of sustainability.
