Climate Change Mitigation, Adaptation Practices, and Business Performance in Brazilian Industrial Companies


Round 1
Reviewer 1 Report
Thank you for the opportunity to read and review this manuscript. I found the article interesting and well structured. The logical argument is solid in assessing the influence of climate change mitigation and adaptation on business performance and the literature review is coherent with the overall aim of the study.
Please find below some suggestions for minor revision that I believe may enhance the solidity of the study and contribution to this strand of research.
- method: the authors specify that the questionnaire was based on a 5-point likert scale, however it is not clear what kind of scale was utilised. E.g. was it based on agreement, adoption or what? Please provide some more information with regard to the scale utilised.
- Sample: please provide more information with regard to sample composition, for instance to what extent the sample is representative of Braizilian industry in terms of sectors, size of companies etc. Also, the sample is very small, so this kind of information can greatly contribute to reinforce the reliability and generalizability of results.
- Literature review and theretical framework: the literature review about mitigation and adaptation is well structured. However, the authors overlook previous studies that also consider the role of supply chain actors in climate mitigation and adaptation: for instance, see Todaro et al. 2021 that distinguishes between internal and external climate action (https://doi.org/10.1002/bse.2681). tAlso looking at the correlation results in terms of externally / internally oriented climate measures may help explaining the significant influence of climate action on different categories of business performance (e.g. production performance vs export performance), and thus add more depth to the discussion of results.
Also, please amend that this sentence at the end of the "Discussion": "Therefore, it is possible to sustain those corporate practices of mitigation and adaptation to climate change are positively correlated with business performance (H1). Similarly, it was also possible to elucidate that corporate climate change mitigation and adaptation practices are positively correlated with business performance (H2)." The sentence does not differentiate between H1 and H2.
Thank you for the opportunity to review this manuscript. I hope the authors find these few comments useful. Good luck!
Author Response
A: The 5-point scale proved to be more adequate when compared to the 3 and 7-point scales in the tests we performed with the application of the questionnaire with some interviewees.
A: We have added a paragraph in the methodology that presents an overview of the Brazilian industrial sector. We agree that the sample size is not ideal, but we chose to consider only companies associated with the Carbon Disclosure Project (CDP) so that it would be composed of companies that best contributed to the proposed study. Even so, this limitation is clarified at the end of the manuscript.
A: We added the work of Todaro et al. (2020) in the theoretical framework.
A: We changed the sentence at the end of the “Discussion” chapter.
Reviewer 2 Report
The paper is a relevant and interesting contribution to the research on corporate responses to climate change. It is good that the study includes adaptation strategies, and does not settle with mitigation. Another issue that should be mentioned is the risk of climate litigation that currently unfolds and might become a future risk for especially larger companies. The 'loss and damage' of the UN Paris Agreement provides the legal and normative backdrop of future claims to compensate victims of climate harms. The paper could mention this and consider if it is part of the strategic risk due diligence in the companies of the Brazilian sample; especially with regard to biodiversity loss of the rain forests.
Another issue related to the above is the normative and moral responsibility industrial companies should have in responses to climate change. The paper should distinguish between the instrumental reasons for responding to climate change and the moral ones - hence, does the correlations revealed show anything about what kind of motives drive corporate responses? Are responses merely strategic and financial, or could the be explained by corporate wishes or pressures to adapt to public views of moral legitimacy.
Furthermore, this leads to the need for the paper to engage with the literature on corporate social responsibility and includes moral norms as part of the explanatory and descriptive arsenal of methodological means. For instance, Toft and Rüdiger 2020 'Mapping corporate climate change ethics' in Energy Research and Social Science.
In section 1 of the paper it is claimed that only few studies explore how companies respond to climate change. However, there is a growing body of research on this topic, so the authors should make a more thorough literature search. In fact this literature is comprehensive, so what is required is to be more precise about what this paper's contribution to this literature is.
The stated hypotheses that corporate responses to climate change (mitigation and adaptation) are positively correlated is not novel and specific enough. The search for financial indicators and the business case of engaging with climate change is proliferating much of the literature, some is in favor and others are skeptical about this correlation. So, the paper needs to formulate hypoteses that are more precise and thus can be tested more clearly. Currently, it is difficult for the reader (at least this one) to interpret the correlation analysis as an answer to the hypotheses.
Please, make the presentation of the correlation analysis easier to read. What level of significance is found? Give an example - how many of the respondents confirm correlation etc. Maybe move some of the technical stuff into an appendix. In that way a greater number of readers can be reached. As it is currently communicated the study will not be cited widely, which is a shame, since it is highly relevant.
Also stress the significance of the Brazilian case at the global level - lung of the world... etc.
It is an interesting finding that your study did not find strong correlation with financial performance; please expand on this.
With regard to limitations of the study; please expand on the significance of relying on respondents views - does this equate with bias and subjectivity? Are there ways to estimate the more objective correlations in the industry to supplement this study?
These are comments that the authors should consider when revising and finalizing the paper.
Author Response
A: We have added a paragraph in the introduction that addresses the need for climate litigation in order to achieve the goals set out in the Paris Agreement.
A: It is an interesting observation and we can take advantage of it in future research. At this time, the study did not have this approach at the time of data collection, which makes this type of analysis unfeasible, since it was not the objective of the study to analyze the issue of corporate pressures and moral legitimacy.
A: There is a growing body of studies that explore this topic, but the literature still lacks empirical studies on adaptation to climate change, as LINNENLUECKE et al. (2013).
A: We added a paragraph that addresses the lack of correlation between climate change and financial performance.