Corporations at Climate Crossroads

How corporations and governance can act together effectively in the urgent global call for climate action.

With climate risks growing, climate action facing political headwinds in many countries, and international cooperation increasingly challenged, Lily Hsueh’s Corporations at Climate Crossroads illuminates how and under what conditions the world’s largest corporations have taken proactive action on climate change during the years leading up to and after the Paris Agreement.

Drawing on insights from economics, political science, and management, the author uncovers how corporations and their leaders are key players in a nested structure of climate change governance. Hsueh shows that corporate leaders' climate actions are shaped by bottom-up and top-down institutions and incentives involving firm, regulatory, and global governance. To navigate uncertainty, corporate responses to the climate challenge are therefore an interplay of internal firm leadership, complementary capabilities in adjacent areas, and strategic and proactive engagement with regulatory process and global governance. Sophisticated large-N statistical analyses of global businesses’ climate mitigation and performance from 2011 to 2020 and illustrative company case studies substantiate the demand for, and supply of, global businesses’ climate mitigation, across sectors, and in developed and developing countries.Part I: Introduction, Framework, Firm-Level Drivers
1 Introduction: The Supply and Demand of Corporate Climate Action
2 Theory of Multilevel Governance Drivers of Corporate of Self-Regulation on Climate Change
3 Opening up the Firm: Internal Management and Organizational Drivers
Part II: Corporate Climate Action and Cross-Level Governance Interactions
4 Global Firms’ Interactions with Domestic Regulation and Global Governance
5 The US Case: Regulatory Pressure and the Clean Power Plan
6 An Interplay of Domestic and Global Governance: Global Firms’ Learning and Norming in the UN Global Compact
Part III: Carbon Footprints, Sectoral and Regional Variations, and Conclusion
7 Linking Global Firms’ Voluntary Climate Action and Carbon Footprints
8 Consumer-Facing and Carbon-Intensive Sectors: A Race to the Top or Bottom?
9 Developed or Develop Countries: What Drives Differences in Voluntary Climate Action?
10 Conclusion: All-Hands-On-Deck: What Happens When Markets and Governments Fail?
Acknowledgements
Appendix 1: Explanation of Climate Disclosure and Greenhouse Gas Emissions Data
Appendix 2: Description of Global Sustainable Business and Climate Action Database: Variables, Construction, and Operationalization
Appendix 3: Explanation of Data, Variables, Models, and Robustness Checks, Chapter 3
Appendix 4: Explanation of Data, Variables, Models, and Robustness Checks, Chapter 4
Appendix 5: Explanation of Models and Robustness Checks, Chapter 5
Appendix 6: Explanation of Data and Robustness Checks, Chapter 6
Appendix 7: Explanation of Models and Robustness Checks, Chapter 7
Appendix 8: Explanation of Data and Robustness Checks, Chapters 8 and 9
Appendix 9: Field Research and Interviews
Notes
Bibliography
Index“Corporations at Climate Crossroads offers a nuanced analysis of corporate response to the climate challenge. It shows how factors internal to the firm in conjunction with its external environment shape its climate behaviors. Highly recommend.”
—Aseem Prakash, Professor of Political Science and Walker Family Professor for the Arts and Sciences, University of Washington

“What drives corporate behavior on climate change? Employing empirical evidence and case studies, Lily Hsueh’s masterful, engaging, and timely book explains how policy and managerial impetus influence climate actions by the private sector."
—Edward B. Barbier, University Distinguished Professor of Economics, Colorado State University; author of Economics for a Fragile Planet

“Hsueh reveals how firms weigh domestic regulation, global norms, and internal leadership to decide if and how much to act. This book is a masterful and timely contribution rich in data and sharp in analysis. With a rare mix of empirical rigor and conceptual clarity, it opens the black box of the firm to reveal why corporate climate action takes place.”
—Alfred A. Marcus, Edson Spencer Professor of Strategy and Technological Leadership, University of Minnesota; author of Strategies for Managing Uncertainty

“With this book, Lily Hsueh injects a much-needed jolt of data-driven realism into a policy debate that has become increasingly polarized, bitter, and dogmatic over time. Everyone who is interested in climate policy and private governance should read this book.”
—David B. Spence, Professor of Law and Rex G. Baker Centennial Chair in Natural Resources Law, University of Texas at Austin; author of Climate of Contempt

“This book breaks new ground, offering an exceptionally rich assessment of the determinants and impacts of corporate managers’ ‘voluntary’ efforts to confront climate change through reduced emissions of carbon dioxide.”
—Lawrence H. Goulder, Shuzo Nishihara Professor of Environmental and Resource Economics Emeritus, Stanford University; coauthor of Confronting the Climate ChallengeLily Hsueh is Associate Professor of Economics and Public Policy at Arizona State University. Previously a Visiting Scholar at the Stanford Woods Institute for the Environment, her work has been featured in major news outlets, including the Financial Times, Fortune, and PBS NewsHour. She was a 2020–21 American Fellow of the American Association of University Women.