Climate Governance and Corporate Eco-innovation

Table of Contents

1. Frontmatter

2. Climate Governance and Eco-innovation: Systematic Review, Perspectives, and Practices

   1. Frontmatter

   2. Understanding the Antecedents and Consequences of Corporate Eco-innovation

      Yudian Chen, Teng Li

      Abstract

      This Chapter provides readers with an overview of empirical research on corporate decision-making about the implementation of ecologically innovative practices (i.e., corporate eco-innovation). Through a systematic review of 100 academic publications, we shed light on the past and present state of corporate eco-innovation research. We initially address the divergency of the terminologies and definitions for eco-innovations in business contexts and its measurements used in quantitative regression analysis. Despite the paucity of prior research on this subject, we aim to provide an overview of the influential factors, driving forces, and motivations that underpin firms’ eco-innovation decision-making, as well as its impact on corporate structure and processes, organizing strategies, and operational efficiency and other performance. We conclude with some suggestions for future research on corporate eco-innovation.

   3. Navigating the Green Path: The Role of Climate Incentives in Shaping Eco-innovation and Firm Policies

      Phuong Le, Thao Ngoc Nguyen, Chau Le

      Abstract

      This chapter overviews the dynamic connection between climate incentives and eco-innovation. It explores how financial and non-financial climate incentives affect the trajectory of eco-innovation within firms. By tracing the historical evolution of climate incentives, this research elucidates their transformative impact on firm policies. This chapter employs bibliometric analysis to shed light on various aspects of the current research landscape concerning climate incentives and eco-innovation. Despite the evident potential of climate incentives, their implementation faces significant challenges. This chapter critically examines these challenges, offering insights into the complexities of design, global coordination, and equity concerns. In addition, the research critiques the effectiveness and fairness of these incentives, fostering a holistic understanding of the subject. Further, this research underscores the promising future research directions for climate incentives and emphasizes their pivotal role in steering the next wave of eco-innovations.

   4. Climate Governance Practices and the Evolutionary Trends in Corporate Eco-innovation

      Kim Nguyen

      Abstract

      This Chapter provides readers with an overview of climate governance practices at global, national, and organizational levels, as well as the evolutionary trends in corporate eco-innovation. This study primarily centers on applying resource-based and institutional theories to clarify the complex connection between corporate governance and eco-innovation. Companies, often constrained by limited resources, operate within the dynamic interaction of social pressures and institutional regulations in sustainable development and green investments. Effectively allocating these resources to align with societal expectations and governmental mandates, particularly in the pursuit of net-zero emissions and carbon neutrality, requires the development of robust climate governance strategies and substantial investments in eco-innovation.

   5. Power Dynamics in Climate Governance and Eco-innovation

      Monika Malik, Shelley Oberoi

      Abstract

      This Chapter overviews the importance of eco-innovation and the involvement of business actors in climate governance. The study highlights significant disparities in the Power and influence of various business organisations within climate governance structures, operating at the levels of nation-states, supranational entities, and individual actors. These disparities are categorised into two key concepts of Power: Structural Power and Discourse Power. Structural Power pertains to the capacity of business entities to shape agendas and establish regulations within the global climate governance framework, thereby showcasing their influential capabilities. Discourse Power explores how individual consumers exert influence by shaping their perceptions of climate change and influencing the decision-making processes of business actors. Business entities can use different forms of Power to influence climate-related matters.

   6. Climate Governance in the Digital Era

      Linh Thi My Nguyen, Devmali Perera, Dao Le Trang Anh

      Abstract

      This Chapter provides insights into climate governance and the implications of emerging technologies such as Artificial Intelligence (AI) and Blockchain in influencing corporate environmental outcomes. We first offer an overview of the traditional corporate governance mechanisms in the context of increasing environmental challenges worldwide. We next define climate governance and discuss various mechanisms and prior findings on their effectiveness. We finally review the roles of the two cutting-edge technologies (AI and Blockchain) in climate governance. Potential applications are also discussed in this chapter.

3. Case Studies and Research on Climate Governance and Eco-innovation

   1. Frontmatter

   2. Achieving the Impossible: Perils of Eco-innovation and Transformational Impact of Charismatic Leadership

      Tabish Zaman, Ngan Duong Cao, Thi Tuong Giang Trinh

      Abstract

      This Chapter provides an overview of the role of charismatic leadership in corporate eco-innovation. In our pursuit of elucidating the concept of eco-innovation, we explore how charismatic leadership can catalyse corporate strategies in the realm of sustainability and contribute to establishing a robust framework for eco-innovation. The exploration is rooted in a theoretical discourse. It aims to illuminate the theoretical linkage between charismatic leadership attributes and their hypothesized impact on fostering sustainability-oriented initiatives within organizational structures, as well as elucidating the potential pathways through which charismatic leadership might facilitate and encourage eco-innovation strategies. Through systematically exploring this subject, we aim to provide a more insightful and professionally grounded perspective on the intersection of charismatic leadership, sustainability, and eco-innovation.

   3. Climate Governance in South Asia

      Maryam Eqan, Junfeng Wan

      Abstract

      This Chapter provides readers with an overview of the pressing necessity for strong climate governance in South Asia, analyzing global and local aspects. South Asia nations have taken proactive measures by implementing domestic regulations, engaging in international initiatives, and developing technical solutions to address climate-related concerns. However, enduring political, socioeconomic, and governance barriers necessitate strategic resolutions. Regional cooperation is crucial for successful climate measures, requiring skilled diplomacy. The chapter thus highlights the importance of South Asia in global efforts to reduce climate change, focusing on the transition to renewable energy and active engagement in international advocacy. Enduring endeavours, collaborative initiatives, and fair settlements are the key as they will convert the goal of climate resilience in South Asia from a mere ambition to a binding commitment that surpasses national boundaries and temporal limitations.

   4. Promoting Sustainable Development Through Improving Green Banking Behaviour

      Sang Tang My

      Abstract

      This chapter provides readers with empirical evidence on green banking behaviour in Vietnam. Green banking has recently emerged as an ideal future model for banks, serving as a foundation for transitioning to a green economy and sustainable development. The study finds that subjective norms, attitudes toward the green bank, perceived behavioural control, and top management support directly affect green banking intention. Subjective norms had the most significant impact of all. All independent variables were found to affect green banking behaviour through the indirect contribution of green banking intention. Furthermore, green banking intention significantly influences green banking behaviour. The research findings imply effective solutions for promoting green banking behaviour in developing countries.

   5. Carbon Discourse, Climate Governance, and Audit Fees

      Chengruizhi Ma, Yifei Bi

      Abstract

      This chapter provides readers with empirical evidence on whether the audit fees would be affected by the firms’ carbon disclosure. The findings show that firms disclosing carbon emission information can significantly reduce audit fees. Further analysis reveals that the state-owned firms’ disclosure of carbon emissions has a more significant impact on audit fees than non-state-owned firms. In addition, the following industries drive the primary results: scientific research and technology services and metal, nonmetal, and machinery.

   6. Business Ecosystem and Sustainable Innovative Practices

      Meryem Altaf, Nosheen Jawaid Khan

      Abstract

      This chapter provides evidence of how the business ecosystem affects companies adopting innovative approaches for sustainable outcomes. We contend that companies alone cannot achieve sustainable outcomes and require collaborative approaches to innovate processes. We identify various internal and external factors in the business ecosystem which could either facilitate or hinder the company’s sustainable innovation approaches. Using multiple case study designs, documentary analysis, and semi-structured interviews, we explore various crucial external factors, e.g., the country’s regulatory framework, culture, available resources, and collaboration of companies with stakeholders, in developing sustainable, innovative approaches. These sustainable innovations (e.g., digitisation, training on health, education, drip irrigation, and water sense technologies) help firms improve their existing products and processes and contribute positively to the environment and society.

   7. The Challenges in Constructing Effective Climate Governance in Southeast Asia: Evidence from Vietnam

      Nguyen Phuong Dung, Vu Truc Hanh

      Abstract

      This chapter provides readers with an overview of regional climate governance in Southeast Asia and climate governance in Vietnam. It then identifies and examines existing shortcomings in climate governance in this country, focusing on its current legal framework and practice of corporate responsibility for climate change adaptation. Based on the analyses and evaluations in the preceding parts, the chapter discusses and proposes practical solutions for policymakers and stakeholders to improve the legal framework and monitoring and enforcement mechanisms, which, in turn, enhance and strengthen effective climate governance.

   8. Eco-Innovative Actions and Small Business Performance

      Olubiyi Timilehin Olasoji, Ravinder Rena, Valerie Onyia Babatope, Omoyele Olufemi Samuel, Jubril Bolaji, Akinlabi Hameed Babatunde

      Abstract

      This chapter presents evidence regarding the association between eco-innovative actions and the sustainability performance of small businesses in Nigeria, which is Africa’s largest economy. It also examines the extent to which small businesses implement eco-innovative actions. Based on a survey of 480 owners-managers, we identify a significant relationship between eco-innovative actions and the sustainability performance of Nigerian small businesses. These eco-innovative actions are found to enhance the resources needed for sustainability performance. Therefore, it is recommended that businesses incorporate eco-innovative actions and sustainability practices into their strategic vision. This alignment with SDG13 is critical and may offer advantages for the environment.

   9. Unboxing Eco-Innovation and ESG for Circular Economy

      Md. Abu Toha, Parvez Alam Khan, Fatima Irfan, Mohd Salim, Mantasha Khan

      Abstract

      This chapter provides empirical evidence on the association between eco-innovation and ESG in Malaysia. First, this study proposes an econometric model based on the emerging Malaysian economy with the resource-based view theory. It then develops a multiple regression for the panel data for 6 years from 2016 to 2021 to test the econometric model and proposed hypothesis. The analysis reveals a positive and significant relationship between eco-innovation and ESG. This finding indicates that eco-innovation enhances ESG practices in the firm and contributes to circular economy practices in the industrial sector.