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What explains firms’ net zero adoption, strategy and response?

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  • Berger-Schmitz, Zola
  • George, Douglas
  • Hindal, Cameron
  • Perkins, Richard
  • Travaille, Maria

Abstract

The past few years have witnessed a proliferation of corporate net zero emission targets. Despite their growing prominence, little is known about firms' motives for, strategies towards and response pathways of net zero. This paper seeks to narrow the current gap in understanding through an analysis of 30 interview responses. We find evidence that net zero targets have been propelled by a combination of institutional and competitive pressures. Yet firms' response to these pressures, in terms of the substantivity of their commitments and strategic positioning in relation to net zero, has varied significantly. Whilst identifying a role for firm-specific factors, we also draw attention to the importance of sectors in understanding variations in corporate responses. A further contribution of the paper is to map out different temporal trajectories of strategic positioning and offer insights into the factors that lead firms to remain static or change their position towards net zero over time. We conclude by discussing the implications of these findings for both future scholarship and the contribution of net zero commitments to public climate goals.

Suggested Citation

  • Berger-Schmitz, Zola & George, Douglas & Hindal, Cameron & Perkins, Richard & Travaille, Maria, 2023. "What explains firms’ net zero adoption, strategy and response?," LSE Research Online Documents on Economics 118646, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:118646
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    File URL: http://eprints.lse.ac.uk/118646/
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    References listed on IDEAS

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    More about this item

    Keywords

    climate mitigation; greenwashing; net zero; sector; strategy; time;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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