Uma análise exploratória do papel dos incentivos monetários no desempenho de carbono de empresas brasileiras
| Autor | Juliana Costa Ribeiro Prates, Alexandra Maria Rios Cabral |
| Cargo | Doutoranda em Controladoria e Contabilidade (UFMG), Belo Horizonte/MG, Brasil Mestre em Ciências Contábeis (UFPE) julianacrprates@gmail.com / Doutora em Engenharia de Produção (UFPE) Professora Associada e Pesquisadora (UFAL), Maceió/AL, Brasil alexandra.cabral@feac.ufal.br |
| Páginas | 75-90 |
75
Artigo
Original
Original
Paper
Revista Contemporânea de Contabilidade, Florianópolis, v. 19, n. 53, p. 75-90, out./dez., 2022.
Universidade Federal de Santa Catarina. ISSN 2175-8069. DO I: https://doi.org/10.5007/2175-8069.2022.e83185
An exploratory analysis of monetary incentives’ role in the
carbon performance of Brazilian companies
Uma análise exploratória do papel dos incentivos monetários no desempenho de carbono de
empresas brasileiras
Un análisis exploratorio del papel de los incentivos mon etarios en las emisiones de carbono de
empresas brasileñas
Juliana Costa Ribeiro Prates
*
Doutoranda em Controladoria e Contabilidade (UFMG),
Belo Horizonte/MG, Brasil
Mestre em Ciências Contábeis (UFPE)
julianacrprates@gmail.com
https://orcid.org/0000-0003-1289-3937
Alexandra Maria Rios Cabral
Doutora em Engenharia de Produção (UFPE)
Professora Associada e Pesquisadora (UFAL), Maceió/AL, Brasil
alexandra.cabral@feac.ufal.br
https://orcid.org/0000-0003-3326-2608
Primary contact address for correspondence*
Av. Presidente Antônio Carlos - de 4201 a 6499 - lado ímpar - Campus UFMG, CEP: 31270010 - Belo Horizonte/MG, Brasil
Abstract
There is plenty of information about mechanisms that can motivate companies’ voluntary reduction of
greenhouse gas (GHG) emissions. However, there needs to be more investigation of the effects that fixed
and non-fixed monetary incentives could bring to executives (who make decisions on these issues). We
analyzed 31 B3-listed companies that disclosed emissions inventories (GHGs) between 2012 and 2019. We
conducted an exploratory analysis using a documental analysis of non-financial disclosures and a two-stage
dynamic panel (GMM-SYS) to control for potential endogeneity problems. The results are robust and
suggest the effectiveness of these monetary incentives to reduce GHG em issions. Our main results are i) A
positive and contemporary relationship exists between monetary incentives and carbon emission reductions.
ii) The variables ROA and Total Assets showed a positive and significant relationship with emissions so the
larger and more profitable the firm the higher the emissions; iii) Despite ineffective GHG environmental laws,
Brazilian companies seem to offer incentives to reduce carbon emissions voluntarily. Our results are relevant
especially for regulators and shareholders, as they provide subsidies for emissions control in developing
countries like Brazil and align interests.
Keywords: Carbon Performance; Executive Compensation; Carbon Emissions; Brazil
Resumo
Há muitas informações sobre mecanismos capazes de motivar a redução voluntária de emissões de gases
de efeito estufa (GEE) pelas empresas. Entretanto, há uma lacuna na investigação dos efeitos que
incentivos monetários fixos e não fixos aos executivos (que tomam decisões sobre estas questões)
poderiam ocasionar. Foram analisadas 31 empresas listadas na B3 que divulgaram inventários de emissões
(GEE) entre 2012 e 2019. Conduzimos uma análise exploratória, com o uso análise documental de
divulgações não financeiras e um painel dinâmico de duas fases (GMM-SYS) para controlar potenciais
problemas de endogeneidade. Os resultados são robustos e sugerem a eficácia desses incentivos
monetários na redução das emissões de GEE. Nossos principais resultados são: i) Existe uma relação
positiva e contemporânea entre incentivos monetários e reduções de emissões de carbono. ii) O ROA e
Ativo Total apresentaram relação positiva e significante com as emissões assim quanto maior e mais
lucrativa a empresa, maiores são as emissões; iii) Apesar das leis ambientais ineficientes sobre GEE, as
empresas brasileiras parecem oferecer voluntariamente incentivos para reduzir as emissões de carbono.
Nossos resultados são relevantes especialmente para reguladores e acionistas, pois fornecem subsídios
para o controle de emissões em países em desenvolvimento como o Brasil e alinham interesses.
Palavras-chave: Desempenho do Carbono; Incentivos Monetários; Emissões de Carbono; Brasil
An exploratory analysis of monetary incentives’ role in the carbon p erformance of Brazilian companies
76
Revista Contemporânea de Contabilidade, Florianópolis, v. 19, n. 53, p. 75-90, out./dez., 2022.
Universidade Federal de Santa Catarina. ISSN 2175-8069. DO I: https://doi.org/10.5007/2175-8069.2022.e83185
Resumen
Existe mucha información sobre los mecanismos capaces de motivar la reducción voluntaria de las
emisiones de gases de efecto invernadero (GEI) por parte de las empresas. Sin embargo, existe una brecha
en la investigación de los efectos que podrían provocar los incentivos monetarios fijos y no fijos a los
ejecutivos (que toman las decisiones relativas a estos asuntos). Analizamos 31 empresas que cotizan en B3
y que divulgaron inventarios de em isiones (GEI) entre 2012 y 2019. Se realizó un análisis exploratorio
mediante una revisión documental de la información no financiera y un panel dinámico de dos etapas
(GMM-SYS) para controlar los posibles problemas de endogeneidad. Los resultados son robustos y
sugieren la eficacia de estos incentivos monetarios para reducir las emisiones de GEI. Nuestros principales
resultados son: i) Existe una relación positiva y contemporánea entre los incentivos monetarios y las
reducciones de las emisiones de carbono. ii) Las variables ROA y Activos Totales mostraron una relación
positiva y significativa con las emisiones, de modo que cuanto más grande y rentable es la empresa,
mayores son las emisiones; iii) A pesar de la ineficacia de las leyes medioambientales sobre GEI, las
empresas brasileñas parecen ofrecer voluntariamente incentivos para reducir las emisiones de carbono.
Nuestros resultados son relevantes especialmente para los reguladores y los accionistas, ya que
proporcionan subvenciones para el control de las emisiones en países en desarrollo como Brasil y alinean
los intereses.
Palabras clave: Desempeño del carbono; Remuneración de los ejecutivos; Emisiones de carbono; Brasil
1 Introduction
Climate change requires not only government action but also the mobilization of the whole society.
The private sector is responsible for Brazil’s eco-efficient advancement in sectors with more significant
environmental impact (Marcovitch, 2014; Marcon et al., 2017). Hence, the company’s challenge involves
both the management of the short and long-term interests within their economic and financial objectives as
well as the concept of sustainable development, and risks management and opportunities from this process
(Cordeiro & Sarkis, 2008).
For companies and investors, it can be something promising, considering that companies
worldwide are increasingly being pressured to improve their environmental performance, minimizing potential
risks and, at the same time, taking advantage of this process (Hoffman 2005; Eccles et al., 2012; Matsumura
et al., 2014; Haque & Ntim, 2020).
To cope with these em erging pressures, some firms worldwide seek different ways of internalizing
sustainable goals in their daily business. One is through employee engagement by providing monetary and
non-monetary incentives (Cordeiro & Sarkis, 2008; Eccles et al., 2012; Cruz et al., 2017; Haque & Ntim,
2020). Understanding the role of monetary incentives to managers (responsible for defining the
organizations’ sustainability strategies) is crucial for organizations. This way, companies could develop
effective mechanisms to meet sustainability goals and, thus, enjoy the benefits resulting from these choices
(Cordeiro & Sarkis, 2008; Ritz, 2020).
The agency theory shows that incentives tend to align the interests between the agent and
principal to the extent that they are used efficiently to converge the agent’s efforts to satisfy the principal’s
interests while also pursuing their interests (Jensen & Meckling, 1976; Cordeiro & Sarkis, 2008; Aguiar &
Pimentel, 2017). Thus, incentive-based strategies can be considered a vital governance mechanism that can
improve the firm’s socio-environmental performance based on the alignment of actors’ short- and long-term
interests (Haque & Ntim, 2020).
However, the role of employee incentives on firms’ social and environmental performance is
divergent or inconclusive. Therefore, this relationship is still unclear, especially in emerging economies.
Previous research has shown that sustainability targets as carbon performance have long-term nature
(Alvarez, 2012) and tend to be more tied to non-fixed incentives, as the risks of poor performance would
affect the interests of both the company and the agents (Freeman et al., 2004; Jamali, 2008). In Brazil, for
instance, research such as Dalmácio et al. (2009) and Anjos (2016) showed that most executive
compensation used to be fixed and not motivational in nature. In other words, risks were not shared,
considering that they did not vary according to the results achieved.
Hence, the interests related to environmental objectives (long-term) seemed to concern only
companies and shareholders without affecting the interests of agents (short-term) unless it is already
incorporated in the agreed fixed compensation (Guimarães, Peixoto & Carvalho, 2017). The existing
empirical literature indicates a positive relationship between executive compensation and sustainable
business practices (Cordeiro & Sarkis, 2008; Prates, 2019; Haque & Ntim, 2020). Thus, the study argues
that monetary incentives may serve as a key determinant influencing firms’ sustainable practices.
From the agency theory perspective, executive compensation formulas are designed to align both
economic and short-term interests and those of the long-term (Haque, 2017; Haque & Ntim, 2020). These
formulas are disclosed on the firm’s Reference Forms (RF) through the CVM website. In addition, alternative
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