Search results

The changing roles of the United Nations (UN) and national institutions have made addressing climate change a critical concern for many multinational enterprises’ (MNEs) survival and growth. This chapter discusses how such institutions, which vary in their nature and characteristics, shape firm strategies for climate change adaptation. Exploring different versions of institutional theory, the chapter demonstrates how and why institutional characteristics affect typical patterns of firm ownership, governance, and capabilities. These, in turn, influence companies’ internationalisation and climate-change strategies. Climate change poses challenges to how we understand firms’ strategic decisions from both an international business (IB) (HQ–subsidiary relations) and global value chains (GVC) (buyer–supplier relations) perspective. However, climate change also provides opportunities for companies to gain competitive advantages – if firms can reconfigure and adapt faster than their competitors. Existing IB and GVC research tends to downplay the importance of climate change strategies and the ways in which coherent or dysfunctional institutions affect firms’ reconfiguration and adaptation strategies in a globally dispersed network of value creation. This chapter presents a perspective on the institutional conditions that affect firms’ climate change strategies regarding ownership, location, and internalisation (OLI), and GVCs, with ‘investment’ and ‘emerging standards’ playing a significant role. The authors illustrate the discussion using several examples from the Global South (i.e. Bangladesh) and the Global North (i.e. Denmark, Sweden, and Germany) with a special emphasis on the garment industry. The aim is to encourage future research to examine how a ‘business systems’, or varieties of capitalism, institutional perspective can complement the analysis of sustainability and climate change strategies in IB and GVC studies.

This chapter discusses the proposed integrated sustainable road infrastructure project implementation (ISRIPI) model and its constructs and sub-constructs, as well as public participation (PP), climate change response (CCR), and stakeholder management (SM). CEEQUAL was the most comprehensive rating system, with 11 criteria. Lim (2009) and Ugwu and Haupt (2007) were the most thorough studies examining sustainability models for infrastructure projects, focussing on social and cultural sustainability (SCS), economic sustainability (ES), environmental sustainability (EnS), institutional sustainability (IS), health and safety (HS), project management (PM), resource utilization and management (RUM), and engineering performance (EP). The Brundtland Report and Rio Summit defined social sustainability as the right to a decent standard of living, social justice between generations, within generations, and around the world. Thin (2002) showed social justice, unity, investment, and safety as aspects of society. Rosenström et al. (2006) defined social qualities as objects that make people happy. Cultural sustainability is access to cultural assets for current and future generations, and cultural legacy is the collection of physical signals passed on from the past to each civilization and, by extension, to all humans. EnS seeks to reduce the environmental impact of road infrastructure projects. Sustainable road infrastructure project implementation (SRIPI) must consider PM issues such as delivery system, risks, duration, performance assessment, sustainability clauses, and contract type. Quality control systems must be set up to ensure the optimum utilization and management of resources in SRIPI. EP criteria measure sustainable road infrastructure projects’ (SRIP) durability, quality, resilience, adaptability, functionality, carrying capacity, and robustness. This research developed an SRIPI model based on the models of CEEQUAL, Lim (2009), and Ugwu and Haupt (2007). The hypothesized framework consists of 37 SRIPI factors, including SCS, ES, IS, HS, PM, RUM, EP, CCR, PP, and SM. It projected the analytical authority of these constructs in the success of SRIPs to test whether the realization of SRIPI outcomes depends on the supposed indicators of the variables. SRIPI is a multidimensional structure composed of 11 latent variables, derived from literature review and Delphi study findings.

Environmental degradation is a global concern that results from massive economic activities. Carbon dioxide (CO₂) emissions are one of the environmental degradation indicators. This study investigates the impact of population, oil consumption, international tourist arrival, and corruption on CO₂ emissions in ASEAN’s five developing countries of Malaysia, Indonesia, Thailand, Philippines, and Vietnam from 1998 to 2017. This study employed panel Fixed-effect (FE) regression to estimate the panel data generated by British Petroleum and World Bank. The result revealed that the population has a significant positive effect on CO₂ emissions. Furthermore, oil consumption has a significant positive effect on CO₂ emissions. Meanwhile, the effect of tourism and the corruption perception index (CPI) as a proxy of corruption on CO₂ emissions was positive but not significant. Authorities should construct such policies to reduce CO₂ emissions by applying low-carbon technologies, green mass transport, and creating less corrupt behavior.

Climate change is a bitter truth for the entire humanity, and it vehemently calls for thoughtful means for environmental protection along with sustainable economic growth. International trade blocs fundamentally represent amalgamation of countries to achieve unified goals like higher living standards, reduced trade barriers, freer labour mobility across member states, social and cultural upliftment, political allegiance to regional association, etc. Throughout the 1990s, these trade blocs have committed to reducing environmental pressures and shifting towards cleaner forms of energy. This chapter examines the relationship between rate of change in carbon dioxide (CO₂) emissions per capita and rate of change in per capita gross domestic product (GDP) in linear, quadratic and cubic polynomial forms with the other control variables like inflow of foreign direct investment (FDI), export of goods and services, population density, urban population percentage and location dummies for the 66 countries falling in seven regional trade blocs. Other than the European Union and North American Free Trade Agreement (NAFTA), the remaining five trade blocs in the study – Association of South-East Nations (ASEAN), South Asian Association for Regional Cooperation (SAARC), Common Market for Eastern and South Africa (COMESA), Mercado Común del Sur (MERCOSUR) and Commonwealth of Independent States (CIS) – contain mostly the developing and some of the fastest growing economies of the world. The panel regression result finds an inverse relationship between rate of change in per capita CO₂ emissions and rate of change in GDP per capita (in linear and cubic polynomial forms), exports and population density, while the other coefficients of the explanatory variables are positive. The study also establishes an Environmental Kuznets Curve (EKC) which is opposite to N-shape during 2005–2019, and that contradicts with the original EKC of inverted U-shaped. However, this shape admits the collective efforts of region-specific trade blocs towards achieving clean environment which is one of the important global goals.

Multinational enterprises (MNEs) own and control technological resources and capabilities that make them critical actors in accelerating the transition toward net zero. Even beyond the energy sector, stakeholders are putting increasing pressure on MNEs to reduce the carbon intensity of their operations, that is, to improve their carbon performance. While there is unambiguous evidence that national climate policy is a critical catalyst for long-term carbon performance improvements, there is limited research on how MNEs’ carbon strategies react to climate policies. This chapter reviews the concepts, drivers, and strategies connected to carbon performance in the broader sustainability and management literature to clarify potential complementarities to international business (IB). The authors then highlight how MNEs will face increasing institutional complexity along two dimensions: (1) the structural diversity of institutional environments and (2) institutional dynamism, primarily reflected by public policy. The proposed conceptual framework maps these two dimensions to national and subnational levels, and the authors present two data sources that allow the quantitative analysis of country differences in the diversity and dynamism of national climate policy. The authors conclude that there are ample opportunities for IB researchers to explore MNEs’ strategic reactions to climate policy and to inform policymakers about the consequences of national climate policy in the global economy.

Carbon leakage – where multinational enterprises (MNEs) transfer carbon-intensive production activities to countries with laxer emissions constraints for cost purposes – is one of the main mechanisms through which international business (IB) contributes to climate change. This chapter discusses a new policy initiative called the Carbon Border Adjustment Mechanism (CBAM) that the European Union (EU) introduced in May 2023 to fight carbon leakage. The authors analyze the logic of CBAM and discuss how it will likely influence IB both in industries that are directly targeted by CBAM and related industries that will face spillover effects.