Disentangling Decarbonisation Ambidexterity: An Analysis of European Companies

Abstract

Corporate strategies to tackle climate change have become a topic of much debate. Yet, limited attention has been paid to understanding how companies exploit and explore decarbonisation opportunities. We posit that the risks imposed by climate change and the opportunities that emerge under such a context require companies to develop a decarbonisation ambidexterity capability to reconcile the exploration of more radical, long-term eco-innovation opportunities, while also being eco-efficient in their current activities. Based on the ambidexterity literature, we ask: How do companies explore and exploit to reduce their carbon footprint? Through an inductive analysis of the climate change reports of 410 European companies from different sectors, we identify seven core exploitative and explorative initiatives adopted by companies in response to climate change. We argue that, to reach the established targets, companies must adopt multiple initiatives focused on both exploring new knowledge and technologies and exploiting improvements in existing routines and processes, and we show how companies have combined these efforts.