Climate change affects a wide range of business chains including the customers (Gasbarro, et al., 2014). The major aim of this report is to find out whether climate change is integrated into your business strategy. Based on whether climate change is integrated in the business strategy, an analysis of whether the business has included other climate related developments, whether the business includes physical climate and whether the business includes regulations have also been done.
These variables are all categorical in nature. Suitable analyses have been done to achieve the objective. The statistical tools used for analyses are excel and SPSS. An explanation for each of the results or outputs are well discussed to bring out the main objective of this report. The report is based on stakeholder theory.
Literature Review
Climate change is the change in the ecological system over a long period over time (Misani & Pogutz, 2015). Climate is a result of a long term change in the weather conditions and it affects all aspects of human life including business.
According to (Gasbarro, et al., 2014), climate change is described as one of the most threatening hazards of the present time. Climate change is forecasted to be causing devastating effects to the businesses and companies in the twenty first century if it is not well managed by a company. This is a good reason for conducting a study to establish whether companies are prepared for such impacts by integrating climate change.
Climate change can affect various departments in a company. According to (Doda, et al., 2015), impacts of climate change cuts across, finance, human capital, customers, science and technology and the field of science. This implies that for a company looking forward to make meaningful profits, then they have to integrate climate change in their business strategy.
The need for integrating climate change and other climate related developments into the strategies of a business is further strengthened by (Misani & Pogutz, 2015). According to this article, climate change is one of the goals of the United Nations. There is a need to integrate climate change and other climate related developments into a business as a goal to ensure sustainable development of a company (Doda, et al., 2015).
Stakeholder theory address the values and morals of the management of an organization (Dale, et al., 2011). In order to ensure proper integration of climate change and other climate- related developments, the management of a company must have values that supports the idea and the future of the company in relation to climate change (Madeleine, et al., 2008).
A management that values the various stakeholders of the company will carry out a thorough evaluation to determine the various stakeholders that are affected or are likely to be affected by a change in climate (Miles & Samantha, 2011). Therefore, such a management will definitely integrate climate change and other climate related developments in the strategies of the company (Miles & Samantha, 2012).
Moreover, the company should evaluate its operations. A company should clearly evaluate whether their business contributes to the changes in climate (Hulme, 2016). Similarly, a company should evaluate whether its operations or existence fuels a cause of climate change (Vittorio, 2010). In the event that a company fuels climate change, then the management should be responsible enough to find out the best ways to integrate climate change in its operations (Humes, 2013).
Conceptual Model
Conceptual model outlines the relationships among the four variables (Frankfort-Nachias, 2015). One of the variables is the dependent variable and the other is independent variable. The other two variables are control variables. An independent variable explains dependent (Jackson, 2017). A dependent variable on the other hand is the variable that is being explained by the independent variable (Richard, 2015).
In our scenario, the independent variable is whether the company include other climate- related developments. The dependent variable is whether the company has integrated climate change in the business (Daniel, 2009). On the other hand, the control variables are: include physical climate and include regulations (Sherwood & Huber, 2010).
The relationship between these three categories of variables can be represented in the diagram below.
Hypothesis is a statement we make about a subject and whose truth value can be tested statistically (Sarah, 2008). Hypothesis is derived from the main objective of the research and it forms the basis of data collection and analysis to supports the research. Hence, this report is based on hypothesis that has been tested and conclusions drawn from the findings/results.
Normally, null hypothesis is the researcher’s position. The null hypothesis is that which is being tested against an alternative hypothesis. Therefore, conclusions are drawn based on the null hypothesis. An alternative hypothesis negates the null hypothesis. An alternative hypothesis is a positive statement while a null hypothesis is a negative statement (Lind, 2008).
A null hypothesis is stated with the denotation H0 while the alternative with a denotation of H1. Hypothesis is stated based on the objectives of the research and the variables involved in the study. In our scenario, our minor objective is to find out whether there exits any relationship between the dependent and the independent variable. The following hypotheses has been tested.1a.
H0: A company’s integration of climate change and inclusion of other climate related developments are not related.
1b.
H1: A company’s integration of climate change and inclusion of other climate related developments are related.
2a.
H0: There is no significant difference in the average number of those companies that integrate (Yes) and those that have not integrated climate change in their business strategy (No).
2b.
H1: There is a significant difference in the average number of those companies that integrate (Yes) and those that have not integrated climate change in their business strategy (No).
Proxy Measures for Theoretical Constructs
|
Theoretical Construct: |
Variables |
Proxy Measure |
Source |
|
Dependent Variable |
Is climate change integrated into your business strategy? |
Responses: Yes and No |
CDP survey |
|
Independent Variable |
Includes other climate-related developments? |
Responses: Yes and No |
CDP survey |
|
Control Variables |
1. Includes physical climate? 2. Includes regulations? |
Responses: Yes and No Responses: Yes and No |
CDP survey |
Research Methods
Data Collection
This report has used secondary data because of ease of collection and the nature of data that are readily available. The source of data for this report is CDP survey. There are a total of 100 entries representing the various companies. There are four variables or factors as explained in the introduction section. All the variables are qualitative in nature with Yes/No responses in all the cases.
Data Analysis
Descriptive Analysis
Descriptive statistical analysis is a way of organizing data in visual format (Frankfort-Nachias, 2015). There are various means of outlining data in descriptive nature or rather ways of conducting a descriptive analysis.
In our scenario, a frequency table has been developed by first organizing the data into those companies that have integrated climate in business (yes) and those that have not (No). Subsequently, a frequency of the other three variables have been developed. The table below outlines the results of frequency and percentage (%) frequency for each category. These results were obtained using excel.
|
Yes (Frequency) |
No (Frequency) |
%Yes |
%No |
|
|
Other opportunities |
84 |
78 |
51.85 |
48.15 |
|
Physical Opportunities |
90 |
40 |
69.23 |
30.77 |
|
Regulation |
91 |
46 |
66.42 |
33.58 |
|
Total |
265 |
164 |
61.77 |
38.23 |
From the table above, it is clear that majority of the companies that have integrated climate change have also other climate related developments (51.85%), include physical climate (69.23%) and regulations (66.42%) compared to those that have not ( 48.15%, 30.77%, and 33.58% respectively).
Majority of those companies that have not integrated climate change have, however, included other climate- related developments (48%). However, few number of companies that have not integrated climate change have no other physical climates as well (30.77%). These observations are also easily observed in the frequency section (the count or number).
Graphical Representation
From the bar graph below, it is clear that majority of the companies have integrated climate change in their business strategies compared to those that have not integrated climate change. This bar graph was obtained using excel.
In this section, hypothesis 1 is tested. Inferential data analysis is a way of making inferences or conclusions about the population using the results or findings from the sample (Frankfort-Nachias, 2015). Our population in this report are all the companies that exist in the world. Our sample on the other hand is the 100 companies that we have their data for analysis.
The analysis in this section has been done using the regression analysis. Regression analysis is a way of statistically establishing or testing for the relationship between the dependent and independent variables (Frankfort-Nachias, 2015). Therefore, this sections determines the truth value of the hypothesis stated in the hypothesis section. The analysis has been done in SPSS. The following hypothesis has been tested.
H0: A company’s integration of climate change and inclusion of other climate related developments are not related.
H1: A company’s integration of climate change and inclusion of other climate related developments are related.
The output of the analysis are presented in the tables below. The first table is the summary table. The summary table enables us to know the suitability of the sample in making inferences about the population (Frankfort-Nachias, 2015). The R square indicates the percentage of the population that that the sample is explaining.
We can tell whether there is indeed a relationship between the two variables. This is seen from the regression coefficient R= 0.143. Therefore the null hypothesis that there is no relationship between the variables is rejected (Frankfort-Nachias, 2015).
|
Model Summary |
||||
|
Model |
R |
R Square |
Adjusted R Square |
Std. Error of the Estimate |
|
1 |
.143a |
.020 |
.015 |
.497 |
|
a. Predictors: (Constant), Other opportunities |
||||
The outcome in this table is enough for stating whether there exits any significant difference in the mean number of companies that integrated climate change in their business strategies and the average number of those companies that have other climate- related developments.
From the table below, the probability value is 0.044 which is less than the level of significance (5%). Hence it is in order to conclude that there is indeed true that there is a significant difference in in the average number of companies that integrated climate change in their business strategies and the average number of those companies that have other climate- related developments. Hence we can infer that, if this is true for this sample then it is as well true for the whole population.
|
Anova: Single Factor |
||||
|
SUMMARY |
||||
|
Groups |
Count |
Sum |
Average |
Variance |
|
CC2.2 – Is climate change integrated into your business strategy? |
100 |
200 |
2 |
0 |
|
Other opportunities |
100 |
122 |
1.22 |
0.173333 |
|
ANOVAa |
||||||
|
Model |
Sum of Squares |
Df |
Mean Square |
F |
Sig. |
|
|
1 |
Regression |
1.016 |
1 |
1.016 |
4.105 |
.044b |
|
Residual |
48.984 |
198 |
.247 |
|||
|
Total |
50.000 |
199 |
||||
|
a. Dependent Variable: CC22Isclimatechangeintegratedintoyourbusinessstrategy |
||||||
|
b. Predictors: (Constant), Other opportunities |
Hypothesis Test (T- Test)
This section presents the hypothesis test for a further hypothesis test on the companies that integrate and those that do not integrate climate change in the business strategies. The following hypothesis is tested (Hypothesis 2).
H0: There is no significant difference in the average number of those companies that integrate (Yes) and those that have not integrated climate change in their business strategy (No).
H1: H0: There is a significant difference in the average number of those companies that integrate (Yes) and those that have not integrated climate change in their business strategy (No).
|
t-Test: Two-Sample Assuming Equal Variances |
||
|
Yes |
No |
|
|
Mean |
88.33333333 |
54.66666667 |
|
Variance |
14.33333333 |
417.3333333 |
|
Observations |
3 |
3 |
|
Pooled Variance |
215.8333333 |
|
|
Hypothesized Mean Difference |
0 |
|
|
Df |
4 |
|
|
t Stat |
2.806638573 |
|
|
P(T<=t) one-tail |
0.024241272 |
|
|
t Critical one-tail |
2.131846786 |
|
|
P(T<=t) two-tail |
0.048482545 |
|
|
t Critical two-tail |
2.776445105 |
It is clear that the p- value (0.02424) is more than the level of significance (5%). This implies that we fail to reject the null hypothesis that there is no significant difference in the average number of those companies that integrate (Yes) and those that have not integrated climate change in their business strategy (No). Hence, we can conclude that there is indeed a significant difference in the average number of those companies that integrate (Yes) and those that have not integrated climate change in their business strategy (No).
Discussion
The major objective of this report is to establish whether companies have integrated climate change in their strategies. From the outcomes above, it is clear that majority of the business (51.8%) have integrated climate change in their strategy. This is an indication that most of the companies agree that it is very crucial to take note of the climate change and the possible effects to in the business. As per the stakeholder’s theory, it is important to stress that the management of these companies view it as morally right to incorporate climate change in the strategies of their companies. The management should incorporate climate change in strategies of their companies to ensure that their companies are sustainable in the long run. A company should strive towards economic sustainability, social sustainability and environmental sustainability.
A company is economically sustainable when it is able to continue with its production in the long run, make profits as well as ensuring that its products are affordable to their clients. Social sustainability comes in place when the activities of the firm does not go against the social statutes of its clients, partners as well as its employees. Similarly, being environmentally sustainable means that all the production processes of the firm are environmentally friendly and does not aid climate change or rather global warming. These are some of the most important issues that the management must put in place as per the stakeholders theory.
Further, this report has also established that there is a very significant difference in the number of companies that have integrated climate change in the strategy and those that have not. This assertion has been supported using the ANOVA test and the T test. Finally, this report has attempted to make inferences about the population using the findings of the sample data. However, the analysis indicates that it is not statistically accurate to use this sample since it only explains 2% of the population. This is a possibility since the sample size is only 100 companies however there are millions of companies worldwide. Therefore, it is accurate to say that our sample is significantly small.
Limitations
Some of these limitations which are of major concern are:
Further Research
Some of the notable gaps are:
References
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