Transnational Climate Governance and the Global 500: Examining Private Actor Participation by Firm-Level Factors and Dynamics

Abstract

In recent decades, businesses have participated in transnational climate governance (TCG) to share information, promote market mechanisms, and to set carbon emission reduction targets. This paper focuses on the Global 500, which are the world’s largest companies by revenue, to examine the factors and dynamics internal to companies that motivate some corporations, but not others, to engage in TCG. Empirical results based on multilevel mixed effects analyses, which separately identify the relative weight of firm and country-level factors, suggest that the likelihood that a firm participates in TCG is higher when it employs a large number of workers, has an explicit sustainability focus, and when there exists a “policy supporter” who champions sustainability policies and practices. Voluntary climate action and carbon disclosure are more likely to take place, along with a higher quality of carbon disclosure when the corporate actor invests in environmental R&D and/or certifies with the ISO 14001 environmental management standard. Moreover, the level of civil liberties that corporate actors enjoy in their respective country of origin is correlated with proactive climate action and carbon disclosure. This study has implications for climate change governance and policies, which have increasingly focused on concrete climate solutions and innovations by non-state and sub-state actors.