Shooting for the Moon? Relationships between Corporate Environmental Aspirations and Achievements

In spite of the growth in the salience of climate change and environmental degradation, progress within companies in relation to reducing environmental impacts is limited and patchy. While there is growing evidence of the role of some firm and industry-level antecedents of corporate environmental performance, relatively little attention has so far been paid to the detailed analysis of how managerial practices contribute to improved environmental achievements. In this paper, we build upon recent conceptual work in the field of organisational aspiration (Shinkle, 2011; Sitkin et al., 2011) to explore relationships between corporate environmental aspirations and achievements. Empirically, we analyse both firms' decisions to set aspirational, “stretch”, targets for environmental achievements, and the role of such targets in shaping subsequent carbon emissions. We find, consistent with Sitkin et al’s (2011) conceptual model, that firms with higher levels of emissions are more prone to choose to set aspirational environmental goals. However, contrary to their framework, we find that firms that make stretch environmental commitments exhibit significantly improved emissions performance relative to other firms, especially where they involve commitments to absolute emissions reductions. Our evidence has significant implications both for managing corporate environmental impacts and for conceptual debates regarding the role of aspirations in influencing organisational performance.