Beyond conventional corporate responses to climate change towards deep decarbonization: a systematic literature review

Abstract

Over the past 20 years, the literature on corporate responses to climate change has offered a vast array of theoretical and practical insights into organizational efforts to reduce business-related carbon emissions. However, it remains unclear whether these efforts will result in significant reductions of carbon emissions. Presently, it becomes crucial to understand, if, why, and how companies can effectively respond to the current challenges of deep decarbonization, defined as the process of emission reduction down to, or close to, zero to limit global warming. By means of a systematic literature review with 370 identified papers, we are able to categorize the main findings of the literature according to the four most common areas of investigation, including drivers, actions, barriers, and facilitators. Additionally, we conduct a comparative analysis of the literature along these four areas of investigation according to two categories: conventional responses and deep decarbonization responses. The results show that the literature on conventional responses to climate change (n = 321) extensively covers all four areas of investigation; however, it only touches on the descriptive (i.e., ‘what’) aspects of decarbonization. The recent and emerging literature on deep decarbonization responses (n = 49) provides novel insights on the prescriptive (i.e., ‘why’ and ‘how’) aspects of deep decarbonization. However, this literature is restricted to mostly regional and industrial foci, and it does not connect drivers, barriers, and facilitators in a systematic way. Thus, we highlight key implications for future research and practice in order to effectively address corporate deep decarbonization.

Disentangling Decarbonisation Ambidexterity: An Analysis of European Companies

“…Second, we build on the literature on corporate sustainability, which has investigated ambidextrous behaviour in the context of green or sustainable innovations in organisations, e.g., [19,20]. We contribute to this literature by looking, more specifically, at the connection between ambidexterity and corporate decarbonisation efforts [4].…”

“…In response to pressures from governments, investors, and other stakeholders, many companies have been taking action to reduce their emissions and adopting a variety of carbon and energy management practices [21]. The literature on climate action from an organisational perspective has investigated issues such as the drivers of corporate climate action, e.g., [7,22], barriers from external, internal, and dimensional perspectives [4], and actions that organisations can take [4,7,8,11]. We turn our attention to the existing body of literature looking at the actions that can be employed by companies in response to climate risks, as this stream of research has been mostly descriptive of 'what' they do, lacking insights on 'how' organisations adopt the proposed strategies and practices.…”

“…These studies have categorised carbon management strategies differently (see Table 1). Most existing research on organisational responses to climate change is descriptive and rarely grounded in management theories [2,4,14,29,30]. Exceptions include studies employing stakeholder theory, e.g., [31,32], and institutional theory [3,33,34].…”

“…Companies make a substantial contribution to global greenhouse gas (GHG) emissions, and their decarbonisation is vital in the fight against climate change [1][2][3][4]. Many studies have focused on identifying and classifying corporate carbon management strategies and practices [5][6][7][8], examining which strategies companies from different sectors employ [5,9] and the outcomes of such strategies [10,11].…”

Raising the bar: What determines the ambition level of corporate climate targets?

“…We found that as corporate climate targets become more ambitious, the presence of key explanatory factors -such as leadership engagement, continual management support, employee involvement, participation in climate initiatives, and stakeholder collaboration -also increases. Corporate responses to climate change encompass the drivers, the mitigating strategies and actions, and the facilitating criteria to overcome these barriers (Johnson et al 2023). When considering implementable strategies and actions, Lee (2012) provides a comprehensive overview of carbon management activities in six categories.…”