SIRI Spotlight

SIRI Faculty Dylan Minor’s New Paper in Academy of Management Perspectives

Forthcoming research in Academy of Management Perspectives (AMP) by Dylan Minor and coauthors, Magali A. Delmas, Kelly Clark, and Tyson Timmer studies a central problem in corporate climate and sustainability reporting: companies often present environmental numbers with a level of precision that the underlying science and data cannot truly support. The paper argues that the real challenge in sustainability disclosure is not simply transparency, but credibility. In other words, publishing more numbers does not automatically make a company more trustworthy if those numbers rest on weak assumptions, incomplete measurement systems, or uncertain cause-and-effect relationships.

The article opens with Delta Air Lines’ former claim that it was the world’s first carbon-neutral airline, a claim that later drew legal scrutiny. That example serves as a concrete illustration of the broader issue the researchers study. Companies are under pressure to disclose climate performance, yet many climate claims depend on complicated chains of evidence, especially when offsets are involved. The research explains that these claims can sound precise while actually being highly uncertain. This helps explain why public trust in environmental claims has weakened and why many firms now face both reputational and legal risk when they overstate what their sustainability efforts have accomplished.

The paper’s main contribution is a framework built around two distinct kinds of uncertainty. The first is effect uncertainty, which asks whether a company’s initiative actually caused the environmental outcome it claims. The second is measurement uncertainty, which asks whether the result can be accurately and consistently quantified. This distinction is important because a company may know exactly what it did, yet still not know whether the action produced the claimed climate benefit. Or it may know the action likely helped, but lack reliable tools to measure the effect precisely. The research argues that managers should diagnose both kinds of uncertainty before deciding what type of disclosure is appropriate.

The paper organizes disclosure choices into four quadrants depending on whether effect and measurement uncertainty are high or low. When both are low, companies can credibly use outcome metrics. For example, if an energy-efficiency upgrade leads to clearly metered reductions in electricity use, reporting a quantified reduction is reasonable. When measurement uncertainty is high, but effect uncertainty is lower, the researchers recommend process metrics, which describe what the firm did rather than making shaky claims about hard-to-measure outcomes. An example would be reporting that a company expanded its supplier base to include more certified minority-owned businesses, rather than claiming a precise economic impact from that change.

When effect uncertainty is high but measurement is more reliable, the paper recommends qualified claims. In these cases, a company may be able to measure a change, such as reduced water use, but cannot confidently attribute all of that change to its own intervention because other outside forces may also be responsible. The most striking conclusion comes when both uncertainties are high. In that zone, the researchers argue that publishing a precise number may actually be misleading. Carbon offsets are their clearest example. Offset claims are plagued by questions about additionality, baselines, permanence, leakage, ecological variability, and differing standards, all of which make both the actual effect and the measurement highly uncertain. 

The findings point toward a more disciplined and credible approach to climate disclosure. Rather than always forcing a number, firms should sometimes rely on qualitative disclosure or even what the authors call strategic silence - deliberately refraining from quantitative claims until the evidence is strong enough. The paper points to examples such as Microsoft identifying over-crediting risks in offsets, IKEA using qualitative discussion for biodiversity work, Patagonia avoiding premature soil-carbon claims, and Delta eventually dropping its carbon-neutral language. The roadmap on the final pages recommends diagnosing uncertainty, selecting the right disclosure type, piloting initiatives, improving data systems, seeking verification, and clearly communicating assumptions. The overall finding is clear: better climate reporting is not about saying more, but about saying only what can be credibly supported.

Personal note:

Dylan Minor has wanted to get his pilot license since a young boy. He finally got his private pilot and instrument rating this past year, as well as his first plane. He is currently involved in the FAA’s push to eliminate lead from general aviation gas.

Adjunct Professor Minor is teaching the SIRI course "ESG and Corporate Political Strategy" at SIPA.