Institutional Drivers of Voluntary Carbon Reduction Target Setting—Evidence from Poland and Hungary

Governments worldwide have launched climate policies to mitigate greenhouse gas emissions (GHG). These aim enhance businesses be active actors in the process of decarbonisation. Therefore, main objective this paper is identify drivers voluntary corporate decarbonisation illustrated by target-setting practices. In particular, aims at diagnosing whether European Union (EU)-wide and country-level foster material commitment mitigating carbon footprint two countries that are exceptionally heavily dependent on fossil fuels: Poland Hungary, which characterised a specific political-economic situation. This analysis focuses related EU sustainable finance initiative enhances companies voluntarily reduce their GHG emissions: (1) financial sector, (2) disclosure, (3) governance policy. At country level, national for state-owned enterprises (SOEs) analysed. The empirical research conducted based economic data group Polish Hungarian publicly listed exposed these regulations. exposure certain approximated through selected characteristics. Logistic regression applied firm-level gathered from Refinitive reports. dataset covers period 2014 2021, with 214 data-points. response variable binary indicator company sets emission targets. proved state ownership, belonging performance-oriented factors significantly negative impact probability setting target emissions. On other hand, company’s size leverage strong positive Also, it was confirmed after 2020 frequency Hungary increased. Additionally, observed firms more willing set targets than ones. analysed policies, only sustainability disclosure policy practices firms. sector targets, while policy, results mixed. vein, shown that, majority, stimulate counter-effective exceptional fuel dependence particular institutional features. original value study stems methodology focusing mix addressing deep settings. presented contributes an on-going debate decarbonisation, mixes framed under agenda may commitments reduction context, findings important policymakers who responsible creating implementing measures devoted process. It recommended should consider specificities designing Europe-wide net-zero transition account potential tensions arising different goals as they effectiveness Future focus verification relationships between variables larger sample key