U.S. corporations’ climate change strategies in response to foreign and domestic regulation. Unintended consequences of regulatory plurality
This report examines how domestic and foreign regulations interact to shape corporate strategies to address climate change. We expect that heightened attention and uncertainty encourage firms to use low commitment strategies that signal involvement in an issue, but discourage high commitment strategies which can expose firms to higher levels of external accountability. Analyzing climate change strategies of U.S. corporations, we find support for the idea that firms with both domestic and foreign regulation experience are less likely to develop emission reduction plans (high commitment strategy) than firms with sole experience from one of the two contexts. Thus, passivity can be an unintended consequence of multiple regulatory initiatives.