‘Corporations at Climate Crossroads’- a Q&A with PLOS Climate Academic Editor Lily Hsueh

We talk to PLOS Climate Academic Editor Lily Hsueh about her new book, Corporations at Climate Crossroads

What was the inspiration for getting started on this book?

I am an economist and policy scholar by training. My quest to understand the role of global businesses in climate economics, policy, and governance began a decade ago when I participated in the Oxford Workshop on Transnational Climate Governance and Domestic Politics at the Blavatnik School of Government. It was there among policy scholars and political scientists of environmental politics that I began to think about the ways in which multinational companies operate in a nested structure of governance, whereby firm-level incentives and constraints are as salient as regulatory and global-level drivers and the ways in which economics and politics are inseparable for understanding climate policy and governance. 

Global businesses have the market leverage and political and economic authority to help change the course of human history. But what drives corporate behavior on climate change? 

And what are the key messages you would like readers to take away?

My new book, Corporations at Climate Crossroads (MIT Press, 2025), investigates multinationals’ investments in climate efforts, across sectors and in developed and developing countries. In doing so, I open the black box of the firm to reveal how firms decide if and how much to act on climate change. 

What I learned from interviewing executive leaders and analyzing corporate climate actions and environmental performance of Global 500 and S&P 500 companies over the past decade, is that their climate decisions are driven by an interplay of both bottom-up and top-down incentives and pressures. 

Executive and managerial leadership, organizational drivers such as complementary business capabilities, and strategic and proactive engagement with regulatory process and global governance characterize corporate decision-making. Global businesses will actively engage in climate action to bolster their reputations and earn goodwill with employees, customers, investors, regulators and other stakeholders.

As climate risks grow alongside political headwinds against pro-climate efforts, there are both pushes toward and pull away from protecting the planet from catastrophic effects. Many global companies are continuing their climate policies, but doing so quietly to avoid scrutiny. They face ongoing pressure from subnational governments, the European Union, customers, and other sources to reduce their impact on the climate. They also continue to look for ways to gain a competitive advantage from investing in a cleaner future. 

What are some of the key themes explored in the book?

There are several themes that I explore in the book. First, Corporations at Climate Crossroads draws insights from and bridges economics, political science, and management in explaining corporate environmentalism in the climate change area. 

Second, my book develops a multilevel governance framework on climate change to delineate dynamic interactions across corporate governance, domestic regulation, and global governance. 

Third, for empirical evidence I employ a mixed methods research design. Quantitative data analyses (with attention to causal inference) of multinational companies’ climate action and environmental performance (e.g., entitywide carbon emissions and emissions intensity) are complemented by illustrative case studies. Illustrative case studies in the book include the UN Global Compact, Adidas, Moody’s, Intel, Microsoft, and the Oil and Gas Climate Initiative, among others. 

Fourth, I distinguish corporate climate leadership from greenwashing by modeling and statistically disentangling firms’ binary decision of making pledges and adopting carbon management strategies (e.g.,  climate disclosure, emissions target or internal carbon price) from their actual level of effort and performance in climate mitigation.

Was there anything you particularly enjoyed learning more about as you worked on the book?

I very much enjoyed interviewing and hearing the diverse perspectives of public and private sector leaders across government, education, technology, finance, retail and apparel, and in hard-to-abate sectors. Altogether, I interviewed fifty corporate leaders, regulators, global governance leaders, and practitioners working in various aspects of corporate sustainability. 

The corporate leaders I interviewed, from tech companies like Intel to sporting goods and apparel companies like Adidas, talked about aligning sustainability efforts and initiatives across their business globally whenever possible. This proactive approach allows companies to more seamlessly collect data and respond to pressures arising domestically and globally, minimizing the need for costly patchwork efforts later. Moreover, global businesses continue to face demands from their customers, investors and employees to be better stewards of the planet.

What are your reflections about the experience of working on the book itself?

In working on the book, I have come to appreciate more fully that solving society’s complex problems requires different disciplines working together. Insights from different fields reveal how political, economic, and market forces, along with firm-level leadership and organizational decisions interact to shape corporate climate action, regardless of whether the political climate is pro- or anti-environmental protection.