Research focus
My primary research stream examines the effects of information and incentives on strategic corporate behavior in the context of climate change and sustainability. A second research stream examines innovation and diffusion of green technology and business practices in support of transition to a low-carbon economy. I address research questions that make novel contributions to management theory, with practical relevance motivated and informed by my extensive private sector management experience. I primarily employ applied microeconomic and econometric methods to drive inference using a combination of observational, experimental, and quasi-experimental research designs.
Academic journal articles:
[10] Callery, P. J. and Kim, E. H. (2024). Set & Done? Tradeoffs between Salience and Attainment Pressures in Corporate Carbon Target Management. In Press, Journal of Management Studies. https://onlinelibrary.wiley.com/doi/full/10.1111/joms.13140
[9] Callery, P. J. (2024). Strategic motivations for corporate social responsibility: profitability or legitimacy? Journal of Business Economics, 94:947-974. https://doi.org/10.1007/s11573-024-01193-9
[8] Callery, P. J. (2023). The Influence of Strategic Disclosure on Corporate Climate Performance Ratings. Business & Society, 62(5), 950-988. https://doi.org/10.1177/00076503221115715
[7] Andrus, J. L., Callery, P. J., & Grandy, J. B. (2023). The uneven returns of transparency in voluntary nonfinancial disclosure. Organization & Environment, 36(1), 39-68. https://doi.org/10.1177/10860266221083338
[6] Callery, P. J. (2022). Join in... and drop out? Firm adoption of and disengagement from voluntary environmental programs. Organization & Environment, 35(1): 30-56. https://doi.org/10.1177/10860266211011233
[5] Callery, P. J., Goodwin, C.C., and Moncayo, D. (2021). Norm proximity and optimal social comparisons for energy conservation behavior. Journal of Environmental Management, 296:113332. https://doi.org/10.1016/j.jenvman.2021.113332
[4] Callery, P. J. and J. Perkins (2021). Detecting false accounts in intermediated voluntary disclosure. Academy of Management Discoveries, 7(1): 40-56. https://doi.org/10.5465/amd.2018.0229
[3] Potoski, M., & P.J. Callery (2018). Peer Communication Improves Environmental Employee Engagement Programs: Evidence from a Quasi-Experimental Field Study. Journal of Cleaner Production, 172: 1486-1500. https://doi.org/10.1016/j.jclepro.2017.10.252
[2] Glassman, D., M. Potoski, and P.J. Callery (2017). The Missing Metrics that Matter to Investors – How Companies Can Develop ESG Financial Value Creation Metrics. Journal of Environmental Investing, 8(1): 206-221. http://dx.doi.org/10.2139/ssrn.3520685
[1] Aceves-Bueno, E., A. Adeleye, D. Bradley, W. Brandt, P. Callery, M. Feraud, K. Garner, R. Gentry, Y. Huang, I. McCullough, I. Pearlman, S. Sutherland, W. Wilkinson, Y. Yang, T. Zink, S. Anderson, C. Tague (2015). Citizen science as an approach for overcoming insufficient monitoring and inadequate stakeholder buy-in in adaptive management: criteria and evidence. Ecosystems, 18(3), 493-506. https://doi.org/10.1007/s10021-015-9842-4
Book chapter:
Callery, P. J. (2023). Corporate sustainability disclosure standards must emphasize outcomes over policies. In S. Kacanski, J. K. Dreyer, & K. J. Sund (Eds.), Measuring sustainability and CSR: From reporting to decision-making. Springer. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4799817
Change is in the Air: Corporate Carbon Target Management and Carbon Emissions
(with Eun-Hee Kim)
Corporate carbon targets—formal commitments to reduce carbon emissions by a set time in the future—are prevalent. Given inherent temporal trade-offs, managing a long-term carbon target is a daunting task for many firms. We find firms frequently change carbon targets after adoption; both relaxing and strengthening of prior targets occur. Surprisingly, target strengthening precedes emissions increases and is inconsistent with the notion of stretch targets. On average, strengthened targets come with extended deadlines, reducing the pressure for immediate action, and do not translate into increased investments in emissions reduction initiatives. When carbon emissions originate more directly from internal firm operations than indirectly from electricity consumption, we observe larger increases in emissions after target change, highlighting the challenge of carbon target management for emissions-intensive firms.
Uncovering accountability cracks: Microfoundational missteps during crisis
(with Gary Caton and Edward Gamble)
This paper explores accountability during crisis. The Paycheck Protection Program (PPP) was a primary United States government response to the COVID-19 pandemic. State governments required all nonessential businesses to close their doors, risking an existential liquidity crisis for many small businesses. The PPP was intended to substitute government funding for lost revenues so small businesses could continue paying their workers, but was hastily deployed. We study microfoundational accountability failures of the PPP that led to suspicious borrowing and plausible fraud, examining the interactions between individuals (business owners and bankers), processes (the PPP rollout policy), and structures (institutional rules and procedures) that enable accountability failures during crisis. We collect and analyze expert commentary from a sample of bankers and conduct a quantitative analysis of the PPP loan application data to search for possible fraudulent applications and the characteristics that can identify them. Our qualitative results highlight three shared banker perspectives regarding the PPP – hasty implementation, ethical dilemma, and regulatory morass. Our quantitative results offer a conservative 27% estimate of borrowers that submitted deceptive loan applications. This amounts to approximately $214 billion of taxpayer money that fell through the cracks. We found suspicious borrowing disproportionately associated with sole proprietorships, loans originated by Fintech banks, and later PPP funding rounds. This paper offers insights into how to combat the causes, mechanisms, and consequences of individual and process failures that pave the way for fraud. Our approach demonstrates a way to understand the accountability weak points and estimate the impacts of these accountability missteps. For future rapid mobilization of crisis response, we offer guideposts to hold individuals, organizations, and institutions to account.
Directing executive bonuses to address the climate crisis: Is it effective?
(with Leanne Keddie and Awais Mojai)
Corporate executive compensation contracts increasingly incentivize nonfinancial performance, such as Environmental, Social, and Governance (ESG) metrics, including greenhouse gas (GHG) emissions. This research examines whether GHG-related incentives in executive compensation plans are effective in reducing GHGs. GHGs are worldwide in their impact, with regulators increasingly restricting extra-territorial activity as evidenced by the Corporate Sustainability Reporting Directive in the European Union. We use a novel artificial intelligence (AI) application to collect data from proxy statements about GHG and ESG incentive use among S&P 500 firms. We go beyond previous studies by examining both explicit and implicit GHG-related compensation in annual incentive plans (not just sustainable compensation policies) and how they affect firm emissions. We find that use of explicit GHG incentives is associated with reductions in Scopes 1, 2 & 3 GHG emissions. However, ESG incentives without GHG metrics, and implicit GHG incentives, are less effective. Our work questions the effectiveness of some approaches to GHG incentives towards reducing emissions. Standard-setters and compensation committees may leverage this research to design more effective GHG incentives.
Good Data, Good Questions: Identifying and Utilizing Comprehensive, Unmediated Datasets for Impactful Research on Organizations and the Environment
(with Dror Etzion, Lucie Baudouin, Leandro Pongeluppe, Rajat Panwar, and Cady Lancaster)
Much research on organizations and the natural environment relies on self-reported data of dubious reliability and accuracy. A new wave of data, originating in satellite observations, forensic genetics, hydrological maps and other sources, can help overcome these shortcomings. We identify several datasets from the natural sciences that are easily accessible and highly accurate, and provide roadmaps for management researchers to utilize them. We further explore the types of research questions these datasets enable, extending beyond the confines of environmental-financial performance relationships that have dominated previous research. By leveraging these and similar datasets, corporate sustainability researchers can obtain clearer insights into corporate environmental impact, opening doors to new avenues of inquiry.
Comparative Advantage of Organizational Forms in Addressing Global Challenges: Examining Landfill Methane Recovery
The emergence of societal grand challenges as a focal point of research has spurred a renewed interest in understanding comparative advantage of varying organizational forms in addressing social and environmental issues, notably from a bottom-up, or local, perspective. Whereas recent theoretical frameworks have rigorously documented contextual characteristics influencing advantage of alternative forms of governance, there has been limited attention given to the perceptions of local community stakeholders, despite their substantial influence in granting legitimacy for actions of local organizations to address global challenges. We address this oversight by integrating theory on comparative governance with the institutional logics perspective, considering the role of two distinct yet complementary logics in the context of local public services provision: a prevailing local ideology and the strength of local community social capital. We examine the diffusion of methane recovery and energy generation from municipal solid waste landfills in the United States, a phenomenon that blends global sustainable value creation—abatement of greenhouse gas emissions—with private value creation through electricity generation. Our theory and findings have important implications for knowledge in the fields of comparative governance, institutional logics, and addressing global challenges.
Moving Targets: Aggressiveness, Attainment, and Temporal Dynamics in Corporate Carbon Targets
(with Eun-Hee Kim)
Carbon emissions reduction targets are becoming a de rigueur component of corporate sustainability disclosures. We explore what carbon targets entail and whether they drive firms toward meaningful reductions of carbon emissions by analyzing target data disclosed by firms to CDP at multiple levels. We start by displaying first-order parameters that are directly disclosed by firms and then illustrate implicit, second-order factors derived from the first-order parameters, which provide a fuller picture of carbon targets and the aggressiveness of emissions reductions embodied therein. Further, we examine temporal dynamics by developing a target matching algorithm that enables us to more directly track targets across years since firms often report multiple targets in a given year and change target parameters over time, blurring comparisons and analyses at the firm-year-target level. We demonstrate that firms’ self-reported claims of target attainment frequently contradict our calculations of actual target attainment based on disclosed carbon emissions and firms regularly alter target parameters from year to year with the adjusted targets becoming less aggressive over time.
How do firms respond to ratings? The influence of rating methodology on disclosure behavior
The rise of Environmental, Social, and Governance (ESG) investing has illuminated long-standing concerns over the ability for sustainability rating schemes to accurately convey not only sustainability-related attributes of firms, but the extent to which firm activities are enabling, instead of detracting from, outcomes valued by society. Prior research has examined the tendency and modes by which firms respond to ratings (e.g. reactivity) and the motivations and methods by which firms attain favorable ratings without substantively contributing to those societal outcomes (e.g. decoupling). Building on recent research detailing the difficulty of rating schemes to credibly measure actual sustainability performance of firms, this study theorizes and empirically examines how a detailed and transparent rating methodology influences what information firms choose to disclose and how such influence may further decouple the rating from the societal outcome the rating seeks to address. In this study, I replicate the scoring methodology of a prominent disclosure mechanism and rating scheme (CDP) and examine the relationships between firm motivation and capacity for strategic response to ratings and valued outcomes, namely carbon emissions. Findings indicate that firms closely attend to rating methodology, both applying greater effort to aspects of disclosure carrying greater rating value and altering disclosure when rating value prescribed by the methodology changes over time. More significantly, I find that on average higher ratings are not associated with better carbon emissions performance, and that strategic disclosure (obtaining a higher rating with lower completeness of disclosure) is associated with poorer emissions performance. The paper contributes to literatures on reactivity and sustainability disclosure, and offers important practical recommendations for policy makers weighing the inclusion of sustainability disclosure standards in regulated disclosure.
Firm Resources, Complementary Assets, and Survival: Lessons from the Solar Energy Venture Capital Boom
(with Youngbin Joo)
This study develops and tests a set of novel theoretical predictions about the conditions under which key resources undermine new venture success. To do this, we revisit the presumption of investment in core technology innovation and complementary assets in a nascent and rapidly growing industry. Drawing on insights from control of complementary assets and innovative business models, we suggest that key resources for the boom period of industry emergence do not necessarily lead to greater rewards during the industry shakeout. Our empirical analysis of exit of new ventures in the solar energy sector supports our approach: startups with core domain positioning, venture capital investment, and technological innovation are less likely to survive and to exit successfully during the period of industry shakeout. Highlighting an understudied paradox in practical settings, this study offers several contributions to knowledge of firm resources and complementary assets, and motivates new lines of inquiry in technology and business model innovation.
Transparency and Secrecy: Corporate Information Strategies Under Competitive and Stakeholder Pressures
Stakeholders increasingly pressure firms for action and performance along issues of concern; transparency is a primary mechanism by which firms communicate about these issues with stakeholders. But firms face a tension between satisfying stakeholder demand for greater transparency and maintaining secrecy when those relevant issues are focal to firm motives for information asymmetry or competitive advantage. This study addresses different strategies firms employ to balance stakeholder and competitive pressures for greater transparency with maintaining secrecy. We develop a typology of secrecy strategies along dimensions of non-financial performance with general relevance to multiple stakeholder groups, hypothesize several antecedents of these strategies, and test those hypotheses using rigorous empirical analyses of firm participation in a prominent voluntary disclosure mechanism. Findings indicate that firms employ different modes of secrecy strategies depending on the prevalent modes of external pressures for transparency. The study contributes to extant theory in competitive secrecy and transparency strategies, and provides insight into nature of secrecy strategies for non-financial information disclosures.
Science-based targets (with Dror Etzion)
Certified B-corporations and virtue signaling (with Edward Gamble and Rick Van den Bergh)
Family businesses and B-corp certification (with Edward Gamble and Dita Sharma)
Bridging economic and environmental tensions: the case of small Vermont dairy farms
Management Incentives for Climate Change and Corporate Carbon Emissions Reduction Targets (with Eun-Hee Kim)
Double Down or Dumb it Down? Investigating Firm Responses to Carbon Emissions Reduction Target Shortfall