An Inconvenient Truth: How Organizations Translate Climate ... · Stern, 2007), many of the...

r Academy of Management Journal2017, Vol. 60, No. 5, 1633–1661.https://doi.org/10.5465/amj.2015.0718

AN INCONVENIENT TRUTH: HOW ORGANIZATIONSTRANSLATE CLIMATE CHANGE INTO BUSINESS AS USUAL

CHRISTOPHER WRIGHTUniversity of Sydney

DANIEL NYBERGUniversity of Newcastle

Climate change represents the grandest of challenges facing humanity. In the space oftwo centuries of industrial development, human civilization has changed the chemistryof the atmosphere and oceans, with devastating consequences. Business organizationsare central to this challenge, in that they support the production of escalating green-house gas emissions but also offer innovative ways to decarbonize our economies. In thispaper, we examine how businesses respond to climate change. Based on five in-depthcase studies of major Australian corporations over a 10-year period (2005–2015), weidentify three key stages in the corporate translation of climate change: framing, lo-calizing, and normalizing. We develop a grounded model that explains how the revo-lutionary import of grand challenges is converted into the mundane and comfortableconcerns of “business as usual.” We find that critique is the major driver of this processby continuously revealing the tensions between the demands of the grand challenge andbusiness imperatives. Our paper contributes to the literature on business and the naturalenvironment by identifying how and why corporate environmental initiatives de-teriorate over time. More specifically, we highlight the policy limitations of a reliance onbusiness and market responses to the climate crisis.

No challenge poses a greater threat to future genera-tions than climate change.

—U.S. President Barack Obama, State of the UnionAddress, January 20, 2015

Of all the challenges facing humanity, none ismore profound than anthropogenic climate change.Through the increasing consumption of fossil fuelsfor energy and transportation and the degradation ofcarbon sinks such as forests and oceans, the Earth’sclimate has alreadywarmedon average by 1�Celsiusfrom preindustrial levels (Mann, 2014). Recentanalysis by the Intergovernmental Panel on ClimateChange (IPCC) suggested the world is on track fora global average temperature increase of 3� to 5�

Celsius by the end of the century, with much of thiswarming locked in as early as 2020–2030 (IPCC,2013). Environmental change of this kind is un-precedented for our species, and climate scientistsargue that such a future is likely to be incompatiblewith human civilization (New, Liverman, Schroeder,& Anderson, 2011). Indeed, the current trajectory ofglobal emissions presents an unimaginable future oflarge tracts of the Earth rendered uninhabitable, thecollapse of global food production, mass species ex-tinction, the acidification of the oceans, dramatic sealevel rises, and storms and droughts of growing fe-rocity (Hansen, 2009; Mann & Kump, 2015).

Responding to climate change is particularly im-portant for scholars in organization andmanagementtheory, in that both the causes and possible solu-tions to climate change derive from our globalizedeconomy and the corporations that underpin it(Howard-Grenville,Buckle,Hoskins,&George, 2014).Corporations are central to the characterization ofclimate change as a “wicked” (Rittell &Webber, 1973;Wijen, 2014)or evena“superwicked” (Lazarus, 2009;Levin, Cashore, Bernstein, & Auld, 2012) problem.For instance, time is rapidly running out as regardsavoiding dangerous climate change, yet corporations

Wewould like to thank JenniferHoward-Grenville for heroutstanding editorial guidance and the three anonymousreferees for their constructive feedback in helping to de-velop thispaper.Wewouldalso like to thankmembersof theUniversity of Sydney andUniversity of Newcastle businessschools for their input on earlier versions of the paper.Funding for the researchuponwhich thispaper isbasedwasprovided by the Australian Research Council (Discoveryfunding scheme, project number DP110104066).

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https://doi.org/10.5465/amj.2015.0718

havehistorically lobbiedagainst emissionsmitigationand delayed action (see, e.g., Helm, 2010; Kolk &Pinkse, 2007; Levy & Egan, 2003). Further, whilecorporations are commonly presented as the bestagents to respond to climate change (Garnaut, 2008;Stern, 2007), many of the world’s major corpora-tions have been the most significant contributors tohumanity’s escalating carbon emissions (Heede,2014). However, despite the criticality of organiza-tional responses to climate change, this is a topic thathas been largely ignored (Goodall, 2008; Tsui, 2013)and has only recently become a concern in organiza-tion and management theory research (Howard-Grenville et al., 2014).

Advances in understanding how organizations re-spond to complex environmental issues such as cli-mate change have been made within the scholarlyfield of business and the natural environment (B&NE)(see, e.g., Bansal & Hoffman, 2012; Starik & Marcus,2000). This literature has explained how firms’ envi-ronmental strategies and practices are influenced bypressure and critique from regulators and competitorsas well as internal champions and external entitiessuch as nongovernmental organizations (NGOs)(Delmas&Toffel, 2012;Murillo-Luna,Garcés-Ayerbe,& Rivera-Torres, 2008; Reid & Toffel, 2009). In re-sponse, businesses have sought to address environ-mental concerns through the practice of “corporateenvironmentalism,” which seeks to balance compet-ing demands between the market and the environ-ment (Hoffman, 2001; Jermier,Forbes,Benn,&Orsato,2006). In the literature on corporate environmental-ism, scholars have highlighted how initial framingsare turned into environmental practices (Bansal &Roth, 2000; Sharma, 2000), and how managers cancognitively uphold these competing demands (Hahn,Preuss, Pinkse, &Figge, 2014) or tensions (VanderByl& Slawinski, 2015). However, the notable lack ofprogress in reducing carbon emissions suggests thatfirms struggle over time to practically deal with suchgrand challenges.

To further understand how firms respond to socialand environmental grand challenges, we utilizea longitudinal approach, analyzing the processthrough which competing demands are interpretedand enacted in response to stakeholder critique andpressure. This, we argue, involves a continuousprocess of “translation” in which organizational ac-tors make sense of potentially challenging ideas andconcepts, negotiate their meaning, and adapt themfor particular situations and contexts (Czarniawska&Joerges, 1996). From this perspective, ideas are notfixed, but, rather, change in the hands of people by

displacing certain aspects of concepts so they fit lo-cal discourses (Maguire & Hardy, 2009), as well ascreating new meanings through association (Callon,1986). Understanding the process of translatinggrand challenges into practice is critical, as this mayguide the establishment of new forms of organizationand governance arrangements that help address so-cial and environmental concerns. This is particu-larly pertinent for long-term, complex challengessuch as climate change, wherein corporations faceconflicting and changing criticism from a range ofdifferent stakeholders.

In exploring how organizations respond to climatechange over time, we undertook five in-depth casestudies of major Australian corporations from dif-ferent industries over a 10-year period (2005–2015).We examined how climate change was addressed,from the motivation to take action to the imple-mentation of policies and practices. Analyzing in-terviews and documents, we found that, while thesefirms initially framed climate change in broad terms,organizational engagement with the concept in-evitably resulted in more limited and less threaten-ing ideas and practices that were amenable toprevailing discourses of profit maximization and“business asusual.”Toexplain this environmentallyregressive pattern, we developed amodel that showshow the translation of grand challenges into corpo-rate practices involves a dialectical process ofresponding to critique or criticism that continuouslyreveals the tensions associated with competing de-mands. We highlight the various stages throughwhich grand challenges are translated within cor-porate settings, and identify how, over time, con-tinuous critique and reassessment results incompromise in favor of a narrow profit motive.

Our studymakes several contributions. First, as anin-depth empirical study of different corporate re-sponses to climate change, we illustrate how grandchallenges are translated to align with more domi-nant business discourses and practices. Continuouscritique of competing demands eventually purifiesdominant market discourses and dilutes climatechange concerns. Second, our comparative andlongitudinal perspective enabled us to developamodel to explain how diverse strategies and tacticsin different firms produce similar outcomes. Thisexplains the limitations of corporate engagementwith grand challenges, and how this engagementsupports dominant market discourses. Third, webalance overly positive or cynical views of manage-rial responses to social and environmental concernswith a model explaining how managerial framings

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and initiatives are continuously challenged by ev-eryday market evaluations. Finally, we identify andexplain the limitations of business corporations’engagement with grand challenges due to the wick-edness of theseproblems.Weargue that corporationsare particularly ill-suited to address climate change,since their short-term objectives and reliance ongrowth and political interventions inflate the super-wickedness of the issue.Our findingshave importantpolicy implications for thosepromoting a reliance onmarket mechanisms and business leadership as thedominant response to climate change. Echoing AlGore (2006), our paper addresses “an inconvenienttruth” for management scholars: the folly of over-dependence on corporations and markets inaddressing one of the gravest threats to our future.

CORPORATIONS AND THE NATURALENVIRONMENT

Since the 1960s, corporations have faced in-creasing criticism from a range of stakeholders overenvironmental problems caused by economic de-velopment (Hoffman, 2001; Hoffman & Bansal,2012). Opposing demands from economic and en-vironmental discourses have acted as a central driverfor corporate change (Hart, 1995), as stakeholdercritique and the threat of regulation have triggeredcorporate environmental activities (Hoffman, 1999).Many corporations have responded to this tensionthrough what Jermier et al. (2006: 618) referred to asthe “new corporate environmentalism” (NCE), de-fined as “rhetoric concerning the central role ofbusiness in achieving both economic growth andecological rationality as a guide formanagement thatemphasizes voluntary, proactive control of envi-ronmental impacts in ways that exceed or go beyondenvironmental laws and regulatory compliance”(emphasis in original). This has resulted in activitiessuch as improving eco-efficiency to reduce energyconsumption and operational costs, increasing sup-ply chain efficiency, identifying new products andservices to satisfy changing market and social de-mands, and “green” marketing to better attract andretain employees and build stronger customer re-lationships (Hart, 1995; Porter & vander Linde, 1995;Russo & Fouts, 1997).

Two basic approaches are used to analyze NCE(Hoffman & Bansal, 2012). The first focuses on en-vironmental issues within the dominant businessparadigm and argues that corporations can addressenvironmental problems and improve competitiveperformance, resulting in a so-called “win–win”

outcome (Fremeth & Richter, 2011; McWilliams &Siegel, 2010). Managers respond to environmentalcritique by signaling the importance of environ-mental concerns to internal and external stake-holders and framing the issue within a defendablebusiness rationale (Bansal & Roth, 2000; Sharma,2000). Through strategic framing, managers filterand construct contextual information into a strategyprocess by including certain aspects of the demandsandexcludingothers (Bundy,Shropshire,&Buchholtz,2013;Hahn et al., 2014). The communicated framing ofenvironmental issues as a threat or an opportunitygathers support and directs new activities (Kennedy &Fiss, 2009). Corporate leaders ensure that the framing islocally enacted by creating specific environmentalroles that provide a legitimizing effect (Bansal & Roth,2000; Howard-Grenville & Bertels, 2012), and envi-ronmental “champions” convince others within thefirm of the importance of environmental issues inmeetings and on committees (Andersson & Bateman,2000).

Despite the general optimism in this normativeapproach, evaluations of NCE recognize the tensionsthat result from the opposing demands of economicand environmental goals. Scholars have pointed outthat, when “pressed to choose between financialgoals and societal goals, firms will normally favortheir financial goals” (VanderByl &Slawinski, 2015:58), thus eliminating the tension between opposingdemands (Smith & Lewis, 2011). To avoid this re-gressive process, scholars have recently emphasizedhow firms can overcome conflicting goals by (a) in-tegrating and aligning competing demands (Hahn,Figge, Pinkse, & Preuss, 2010; Whiteman, Walker, &Perego, 2013), or (b) juxtaposing and combiningeconomic and environmental concerns (Gao &Bansal, 2013; Hahn et al., 2014). In the former in-tegrative approach, the firm’s economic focus iscounterbalanced by placing greater emphasis on theenvironment, while the latter juxtaposing approachrequires continuous stakeholder management andnegotiation. However, as Van der Byl and Slawinski(2015) pointed out, there is limited knowledge ofhow firms integrate or balance competing environ-mental and economic concerns. Beyond the lack ofempirical studies, it is not clear conceptually howfirms that are continuously facing competing in-ternal and external criticism manage the tensionsthat come with complex challenges.

The second, critical approach in evaluating NCEconcludes that firms ultimately cannotmanage thesetensions; themarket–environment conflict is seen asfundamental and cannot be upheld within the

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corporate world (Banerjee, 2003). Scholars withinthis critical approach argue that the natural envi-ronment fails to be enacted within organizationsbeyond an immediate profit motive (Fleming &Jones, 2013; Levy, 1997; Newton & Harte, 1997),resulting in a trade-off in which the market trumpsenvironmental well-being (Nyberg & Wright, 2013;Starkey &Crane, 2003). A first level of critique in thisrespect relates to the way in which such initiativesmerely provide the appearance of environmentalbenefit (i.e., “greenwashing”) (Bowen, 2014; Lyon &Montgomery, 2015). In this view, NCE papers overthe dissonance between the rhetoric and the realityof corporate greening, maintaining social legitimacyby placating concerned consumers and forestallingenvironmental regulation (Newton & Harte, 1997;Prasad & Elmes, 2005).

More substantively, however, others argue thatcorporate initiatives such as greener supply chainsand “carbon neutrality” are driven by more basicbusiness goals of cost reduction, productivity im-provement, and market expansion (Dauvergne &Lister, 2013). Corporations invest in these programsnot so much to ensure environmental sustainability,but to maximize business sustainability (Banerjee,2003). NCE thus involves firms incorporating envi-ronmental critique from NGOs, the media, and em-ployees within voluntary business activities thatdistract from the revolutionary changes actually re-quired to address serious systemic environmentalchallenges.While compromise between the interestsof the market and the environment may result, thecontinuous evaluation of corporate greening prac-tices within both market and environmental dis-courses suggests that these compromises are, at best,temporary solutions (Nyberg & Wright, 2013).

Thus, both normative and more critical re-searchers highlight the strategic relevance of envi-ronmental challenges within corporations and therole of senior managers in strategically framing themeaning of an issue toward a preferred interpreta-tion. Through strategic framing of an issue,managersinterpret and construct a particular version of realityto internal and external audiences (Fiss & Zajac,2006; Kaplan, 2008; Kennedy & Fiss, 2009). Theyshape the meaning of the issue by promoting firmresponses corresponding to their interests andvalues (Sonenshein, 2016), and legitimize decisionsand activities implemented in the firm (Vaara &Tienari, 2008). However, while there is literature onthe role of managerial framing for both internal(Kaplan, 2008) and external (Fiss & Zajac, 2006)audiences, as well as upward influence through

issue selling of environmental concerns withinorganizational settings (Andersson & Bateman,2000; Howard-Grenville, 2007), we know far lessabout the process through which firms reconcilecompeting demands from divergent stakeholdergroups as they create and maintain frame-alignedlocal practices.

Further, beyond initial managerial framings, it isimportant to understand how organizations respondto stakeholder critiques and pressures over time.External and internal actors are active agents(Cornelissen & Werner, 2014), with environmentalpractices and activities open for translation in re-sponse to environmental and financial demands(Maguire & Hardy, 2009). Considering these com-peting demands, firms face the risk of ongoing in-ternal and external critique in how they engage withthe grand challenge—from initial framings toimplementation of practices and evaluation of theirsuccess and failure. As a result, while corporateleaders may initially use framing tomanage tensionsbetween market and environmental discourses, theprocess throughwhich framing informs practice andis upheld by involved actors in subsequent evalua-tion of environmental practices remains unclear.Accordingly, the guiding research question for thispaper is as follows: How do firms engage over timewith competing demands in translating complexsocial and environmental challenges into practice?

THE WICKEDNESS OF CLIMATE CHANGE

Unlikemost challenges that businesses face, climatechange has become a highly charged and partisan po-litical issue intertwined with deeper ideological andculturaldivisions (Hoffman,2015;McCright&Dunlap,2011). For instance, discussions about climate changein social and political discourse often include com-peting economic, religious, national security, in-novation, environmental, and governance frames(Ansari,Wijen, &Gray, 2013; Hoffman, 2011). Further,despite overwhelming scientific evidence, organiza-tional members may identify with climate changemovements or political parties that oppose action onclimate change (Sonenshein,DeCelles,&Dutton, 2014;Wright, Nyberg, & Grant, 2012). Corporate actors canexpect to simultaneously face criticism for supportingas well as opposing action on climate change. Thispolarized debate also fuels the external volatility thatinfluences corporate responses as they seek to alignconflicting stakeholder positions.

The “super wicked” nature of climate change fur-ther exacerbates the limitations of substantive


corporate responses to it. First, time is rapidly run-ning out if humanity is to avoid dangerous climatechange (Anderson & Bows, 2011; IPCC, 2014). Thistemporal aspect is important, in that corporationsalone cannot deal with the increasingly costlyproblem, especially not within quarterly or yearlyreporting timeframes. Rather, climate change re-quires long-term strategies beyond the commitmentsof individual leaders and champions. It is thereforecrucial that corporate climate change initiativeshavelongevity beyond their initial framings.

Second,while corporations are often viewedas theentities in the best position to address climate changethrough technological andmarket innovation (Garnaut,2008; Stern, 2007), they are also major contributors toclimate change. Corporations represent 40% of theworld’s largest economic entities, with both revenuesand greenhouse gas emissions dwarfingmany nationaleconomies (Heede, 2014; Patenaude, 2010). In a globaleconomy based on economic growth and fossil fuel-based energy, corporations have limited incentives toundertake radical decarbonization, and have resistedattempts to legislatively restrict emissions (Kolk &Pinkse, 2007; Levy & Egan, 2003). Internal championsare often left to argue against themaximizationof short-term profit that typically drives firm decision-making(Wright et al., 2012).

Finally, no central authority exists to deal withclimate change. The global response has been lik-ened to “cooperation under anarchy” (Levin et al.,2012: 128), since it requires coordination of differenteconomic sectors, policy jurisdictions, and indus-tries at multiple political levels. Even a globalagreement would have insufficient legal authority toaddress the implications for different states, sub-regional systems, and industry-specific regulations.Corporations thus face a complex external context inresponding to this challenge.

Each of these features renders the process oftranslating climate change into strong corporate re-sponsesparticularly difficult, sincedoing so requirespurposeful dedication to a strategy in the face ofcompeting critiques in an uncertain environment. Inorder to better understand how businesses respondto the grand challenge of climate change, we explorehow firms engage with competing demands intranslating this challenge into practice.

RESEARCH SETTING AND METHOD

Australia provides an ideal setting in which toexplore how corporations have responded to climatechange. It is one of the world’s largest exporters of

coal and natural gas, and has among the highestlevels of greenhouse gas emissions per capita amongdeveloped economies (Garnaut, 2008). Under con-servative government rule from the mid-1990s,Australia adopted a minimalist approach to climatechange policy, viewing emissions mitigation asa threat to economic growth and fossil fuel exports(Pearse, 2007). This perspective was evident in-ternationally, in Australia’s refusal (along with theUnited States) to ratify the Kyoto Protocol to theUnited Nations Framework Convention on ClimateChange.

As outlined in Table 1, from 2005–2015, an in-creasingly partisan political debate raged in Aus-tralia over climate change. By 2005–2006, opinionpolling revealed that it had become a primary area ofpublic concern, and political parties explored policyresponses such as carbon pricing. A change in gov-ernment in2007highlighted thispolicy shift,with theincoming Labor government led by Prime MinisterKevin Rudd finally ratifying the Kyoto Protocol andcommitting to the introductionof a carbonemissionstrading scheme (ETS). This policy focus coincidedwith unprecedented extreme weather events, in-cluding the “BlackSaturday”bushfires inVictoria inFebruary 2009 in which 173 people lost their lives(Head, Adams, McGregor, & Toole, 2014).

However, failure to reach a global agreement at the2009 United Nations Climate Change Conference inCopenhagen, conservative political opposition, andgrowing resistance from industry led to thedeferral ofemissions trading. Narrowly holding on to power inthe 2010 federal election, the minority Labor gov-ernment under Prime Minister Julia Gillard an-nounced the introduction of a fixed carbon price asaprelude to a carbon trading system (Commonwealthof Australia, 2011). Opposition political parties, withbacking from the media, right-wing think tanks, andindustry groups, launched a highly effective publiccampaign against what was dubbed a “toxic carbontax” (Manne, 2011). This proved to be a key factor inthe defeat of the Gillard government in the 2013election, after which, under the conservative leader-ship of PrimeMinister Tony Abbott, climate policieswere disbanded and Australia became the firstdeveloped nation in the world to abolish a price oncarbon emissions.

Within this fractious political context, Australianbusinesses sought to navigate not only the uncertainregulatory context around carbon pricing, but alsothe risks and opportunities that might come frommoving toward a future low-carbon economy. Com-panies that had previously taken widely divergent


stances on climate change began to develop climate-change specific strategies.

The Study

This paper is part of a larger research project ini-tiated by the authors in 2009 exploring the strate-gies and practices businesses have developed inresponding to climate change (for a summary, seeWright & Nyberg, 2015). Through interviews withexecutives, specialist managers, industry groups,and consultants in a range of large Australian cor-porations, we identified how business responses toclimate change involved both external political en-gagements (Nyberg, Spicer, &Wright, 2013;Wright &Nyberg, 2014) as well as internal strategies andpractices aimed at improving eco-efficiency, devel-oping new products and services, green workplacecultures, and marketing themselves as environmen-tally responsible organizations. The initial focusof the project centered on how individual actors(Wright & Nyberg, 2012; Wright et al., 2012) andfirms (Nyberg & Wright, 2012, 2013, 2016) struggledwith the challenge of climate change.

However, an emerging theme from our earlier re-searchwashow initially strong corporate engagement

with the issue of climate change dissipated over timeas contextual and internal dynamics changed. Thisled to a new research focus; specifically, how corpo-rations engaged longitudinally with social and envi-ronmental challenges in response to competingpressures. To more fully explore this temporal adap-tation in corporate climate response, we expandedour earlier research and focused specifically on fivefirms as longitudinal and comparative case studies.This involved extending our data collection by con-ducting follow-up interviews with key informants ineachorganization tocapture recentdevelopments andrelate back our earlier findings, and gathering archivaldata and a comprehensive collection of media re-leases from each organization over the time period ofour investigation. This additional data collectionallowedus tocreate five in-depthcase studiesofmajorAustralian corporations fromdifferent industries overa 10-year period (2005–2015). In responding to thenew research focus, we conducted a new process ofcomparative data analysis, fromwhichwe developeda model of the corporate translation of grand chal-lenges over time.

As outlined in Table 2, the five case organizationsincluded a leading energy producer that was supple-menting coal-fired power with renewable energy

TABLE 1Context of Australian Climate Change Debate, 2005–2015

Date Developments

Nov. 24, 2007 Federal election:AnAustralianLaborParty government led by then-Opposition leaderKevinRudd is electedDec. 12, 2007 Australia ratifies the Kyoto ProtocolSept. 30, 2008 The final report of the Garnaut Climate Change Review is released, advocating for the introduction of an ETS

(Garnaut, 2008)Feb. 7, 2009 “Black Saturday” bushfires in Victoria (173 deaths); public debate ensues over links to climate changeMay 14, 2009 ETS legislation introduced into ParliamentDec. 18, 2009 The 15th session of the Conference of the Parties to the United Nations Framework Convention on Climate

Change concludes in Copenhagen without a binding agreement on climate actionFeb. 2, 2010 ETS legislation is rejected in ParliamentApr. 27, 2010 Government delays the introduction of carbon pricing until the end of 2012Aug. 21, 2010 Federal election: TheAustralian Labor Party, led by PrimeMinister Julia Gillard, retains power in aminority

government alliance with three independent MPs and one Australian Greens MPDec. 2010–Jan. 2011 Floods in Queensland affect 90 towns and more than 200,000 people. Direct damage is estimated at A$2.4

billion, with 38 fatalities. Debate ensues over climate change linksNov. 8, 2011 ETS legislation passed by ParliamentJuly 1, 2012 Carbon pricing comes into effectJan. 2013 Climate Commission publicizes Australia’s “Angry Summer” (123 weather records broken over a 90-day

period, including the hottest January on record)Sept. 18, 2013 Federal election: the center-right Liberal/NationalCoalitionwins andassumespowerunder then-Opposition

leader Tony AbbottSept. 19, 2013 Abbott Government abolishes the Climate CommissionNov. 13, 2013 Abbott Government introduces repeal bill for ETS and carbon pricingJan. 2014 Australia’s second “Angry Summer” (150 temperature records broken over 90 days)July 17, 2014 Repeal of carbon pricing passed by the Senate

Note: ETS5 emissions trading scheme.


(hereafter, “EnergyCo”), a major financial servicescompany that was factoring a price on carbon into itscorporate lending (“FinanceCo”), a global manufac-turer that was reinventing itself as a green producer ofrenewable energy technologies (“GlobalCo”), a largeinsurer focused on the financial implications of ex-tremeweather events (“InsureCo”), and a global mediacompany that had embarked on an eco-efficiency driveto become carbon neutral (“MediaCo”). The casesweretheoretically sampled for their strategic engagementwith climate change (Yin, 2003), and from differentindustries to yield more generalizable explanations ofpatterns and relationships across the cases (Eisenhardt& Graebner, 2007). This strategic focus helped us for-mulate a theoretical explanation of the process, and thecompanies’ distinct actions strengthened our conclu-sions (see Table 2 below).

Data Collection

The first stage of data collection involved a sys-tematic review of publicly available sustainability

reports, web pages, and presentations from eachcompany, which resulted in an extensive collectionof textual data (see Table 3). To provide contextualdetail for the longitudinal analysis in this paper, weextended the document data collection back to 2000,in order to trace changes in corporate leadership andunderstand the pre-history of these companies’ en-gagement with climate change discourse.

A second stage of data collection began in 2010,when, as part of our broader research project, weperformed semi-structured interviews with a rangeof managers from the five corporations, includingsustainability specialists, senior managers, and op-erational managers (see Table 3 for details). Weinterviewedmembers from each organization duringthe period 2010–2014 in order to understand changeand continuity in organizational practices andthinking. During these interviews, we asked each re-spondent to reflect on the historical context of thecompany’s engagement with climate change beforeexploring the company’s current climate change re-sponses. For the longitudinal and comparative

TABLE 2Corporate Case Studies

Case Industry Employees (AUS) Description of climate change engagement

EnergyCo Electricity and gas 1,500 c One of the country’s largest greenhouse gas emittersc Rebranded itself in 2005 as a “green” energy companyc Invested in renewable energy generation (hydro, wind, andsolar) to supplement aging coal-fired power stations

c Began to advocate strongly for an ETS and redesignedbusiness processes for carbon pricing in 2009

FinanceCo Banking 36,000 c One of Australia’s largest financial institutionsc Focused on environmental reporting since the mid-1990sand began to advocate strongly for climate science andgovernment pricing of carbon emissions in 2006

c Established carbon trading and began to price carbon risk ininstitutional lending in 2009

GlobalCo Manufacturing 5,600 cNewglobalCEO launcheda focusoneco-innovation in2004c Established targets for eco-innovation R&D, sales from eco-products, and reductions in carbon emissions and waterusage

c Developed eco-innovation challenges with partnerorganizations

InsureCo Insurance 15,000 c In 2001, a new CEO focused corporate strategy onsustainability and climate change

c Operationalized through R&D into climate change andextreme weather events in terms of insured risk

c Began to advocate strongly for government action onclimate change and carbon pricing in 2006

MediaCo Media and communications 8,000 c CEO launched focus on climate change in 2007c Emphasized reducing the company’s carbon footprint andimproving energy efficiency

c Implemented a culture change initiative aimed at achievingcarbon neutral status


aspect, we conducted 10 follow-up interviews withkey informants during 2015 to relate back our find-ings to case study participants and confirm the latestdevelopments in each organization (for a total of70 interviews). Each interview lasted between 50and 120 minutes and was recorded and fully tran-scribed, providing a rich and extensive source ofqualitative data (amounting tomore than 1,620 pagesof transcript).

In building each case study, we also accessed anextensive range of private documentation, includingcorporate strategy and policy documents, Power-Point presentations, communications, training doc-uments, and submissions to the government onproposed carbon regulation. In order to understandhow the five cases responded to external pressures inregard to their activities, we conducted a compre-hensive search of all media releases from the five

TABLE 3Data Source Material

Organization Interviews Documents

EnergyCo 19 interviews; 412 pages of transcript Sustainability reports, 2006–2014; Carbon PollutionReduction Scheme submission; strategy andgreenhouse gas policy documents (51 documents;420pages);media releases (49documents; 61 pages)

01 Lead of Electricity Workstream; 02 Business Partner,People and Culture; 03 Sustainability Manager; 04Manager, Sustainability Strategy; 05–06 BusinessCustomer Commercial Manager; 07 Manager,Greenhouse Reporting; 08 National Sales Manager; 09Manager, Economic Policy & Research; 10 ChiefEconomist and Head of Corporate Affairs; 11Environmental ReportingAdvisor; 12Head,WholesaleElectricity; 13–14 Head, Carbon Price Implementation;15–19 Head of Sustainability

FinanceCo 14 interviews; 350 pages of transcript Sustainability reports, 2007–2014; Carbon PollutionReduction Scheme submission; financingsustainable energy; climate change policydocuments (28 documents; 295 pages); mediareleases (52 documents; 65 pages)

01–04 Advisor, Group Sustainability; 05–08 Director,Emissions & Environment; 09 Director, Carbon &Energy Project Finance; 10 Senior Manager, CorporateAffairs & Sustainability; 11 Head of Agribusiness; 12Director, Carbon, Corporate & Institutional Banking; 13Director, Infrastructure & Utilities; 14 Manager, GroupSustainability

GlobalCo 10 interviews; 157 pages of transcript Eco-products annual reports, 2008–2013; marketingand media reports (48 documents; 246 pages);media releases (28 documents; 33 pages)

01 Head of Business Development & Strategic Planning;02–03 Commercial Director and Eco-Products LeaderAUS/NZ; 04 former Head of Eco-Products AUS/NZ; 05Global Director, Eco-Products; 06 Smart Grid BusinessLeader; 07 Corporate Communications Director; 08Vice Chairman; 09 Vice President, Operations; 10 CEOAUS/NZ

InsureCo 11 interviews; 321 pages of transcript Annual reviews and sustainability reports,2006–2014; environmental sustainability policydocuments; PowerPoint presentations (28documents; 35 pages); media releases (21documents; 29 pages)

01 former Sustainability Manager; 02 former StrategyDirector; 03 Senior Advisor, External Relations; 04former Director; 05 Manager, Natural Perils; 06 SeniorSpecialist, Sustainability; 07–08 BusinessSustainability Manger; 09 former SustainabilityResearchManager; 10 formerGroup Executive, Culture& Reputation; 11 former Chief Risk Officer

MediaCo 16 interviews; 389 pages of transcript EnergyReductionPlans, 2009–2013;CarbonPollutionReductionSchemesubmission;CEOclimatechangestatement; company energy initiative statements;PowerPoint presentations; staff survey reports (55documents; 337 pages); media releases (17documents; 28 pages)

01Editor inChief; 02PressCrewSupervisor; 03ManagingEditor; 04 General Manager; 05 Procurement Manager;06 Creative Director; 07 Human Resources Director; 08Director of Corporate Affairs; 09 Group OrganizationDevelopmentManager; 10 Human ResourcesManager;11 Communications Manager; 12–15 Manager,Environment & Climate Change; 16 Assistant Manager,Environment & Climate Change

Total 70 interviews; 1,629 pages of transcript 377 documents; 1,819 pages


organizations over the period 2005–2015, collectingany documents that mentioned “climate change,”“environment,” or “sustainability” during this pe-riod.We thus compiled an additional body of textualdata (172 media releases) across the 10-year timeperiod, and included this in our analysis (seeTable 3).

Data Analysis

The first stage of data analysis involved a detailedreading of the collected textual material (interviewtranscripts, corporate documents, and media re-leases) across the five cases. Through this process,we developed case histories and timelines of theorganizations and their climate change practices,which we compared with the recent history of Aus-tralian and international climate policy. As wemapped key dates and milestones over time, twoconsistent themes emerged across the cases: (1) ini-tially, companies made strong and diverse commit-ments to address climate change, and (2) their effortswaned over time into “business as usual.” As wedelved into the B&NE literature to understand theseemerging themes, we found explanations for corpo-rate engagement with climate change, but limitedexplanations concerning how strong commitmentsare incorporated yet eventually dissipate withinconventional business practice.

During the second stage of the data analysis, wereturned to the empirical material and performeda process of “open coding” (Corbin & Strauss, 1990).Using the qualitative data analysis software NVivo(QSR International), we coded for empirical themesaround the practices, strategies, narratives, and dis-courses we had identified in the text. Initially, theprocess of labeling terms and phrases in the empiri-cal material was performed “in vivo” (Locke, 2001).After reading the data multiple times, we combinedsegments of text reflecting similar wordings or ac-tivities into first-order categories, resulting in theclassification of more than 60 primary nodes. Thesenodes represented engagement with climate change(e.g., “business case,” “innovation,” or “risk”),descriptions of activities and practices (e.g., “eco-efficiency,” “carbon pricing,” or “new products andmarkets”), and changes in approach (e.g., “backto basics,” “expanded focus,” and “leadershipchange”). Building from these initial first-ordercodes, we then coded for similarities and differ-ences across the five cases to discern the main cate-gorization of climate change in the empiricalmaterial.

In the third stage, we used second-order or axialcoding to search for patterns and relationshipswithin and between the first-order categories and thecase studies (Strauss & Corbin, 1998). We combinedthe categories into themes explaining how they re-lated to corporate activities and practices across thefive cases. Through this analysis, we arranged thenodes we had identified in our initial open codingwithin broader, conceptually informed categories.We identified a range of higher-order concepts re-lated to the different processes andpractices throughwhich companies engaged with climate change, in-cluding ruling particular understandings of climatechange in or out (“association” and “disassocia-tion”), developing roles, products, and services(“incorporation”), transforming different qualities intoa common metric (“commensuration”), promotingand marketing eco-business activities (“proselytiza-tion”), reemphasizing the dominant discourse ofvalue creation (“purification”), and broadening cor-porate sustainability objectives beyondclimate change(“dilution”).

In the fourth stage,we applied these concepts backto our case histories of the five organizations in orderto discern how corporate responses to climatechange changed over time. By mapping the second-order themes to the case history timelines, we iden-tified three stages of the translation process: (1)framing, (2) localizing, and (3) normalizing. In thefirst stage, “framing,” senior managers acted as in-terpreters, defining climate change as an importantissue for their organizations that was compatiblewith their business interests. The second stage, “lo-calizing,” involved senior and middle managersmaking new framings locally relevant by aligningthe challenge of climate change with local practices.The third stage, “normalizing,” involved decision-making throughout the firms that realigned earlierclimate change initiatives with the dominant orga-nizational discourse of maximizing shareholdervalue. We detail the coding frequencies for each ofthese concepts in each case over different time pe-riods in Table 4.

Since these three stages were common to all fivecases, we were able to compare process dynamicsover time (using matrix coding queries in the NVivosoftware). Figure 1 represents the data structure thatemerged from our analysis of how the case studycorporations responded to climate change, illustrat-ing the first-order categories, the second-orderthemes, and the aggregate dimensions that servedas the foundation of corporate responses to climatechange (Gioia, Corley, & Hamilton, 2013). Matching


these against the coding frequencies (see Table 4)confirmed that the process has three distinct stagesthat varied in timing between the cases. However,while grounded coding describes the process overtime, it does not offer an explanation of how the fivefirms moved through the stages.

Finally, using the aggregate dimensions of thethree stages as a foundation, we returned to the casehistories to identify when and why firms moved be-tween the different stages and altered their activitiesand practices. This enabled us to map key events inthe case histories to how organizations responded tothe critiques and pressures originating from socio-political and intraorganizational contexts. Whilethe grounded coding provided the aggregate di-mensions, the longitudinal aspect enabled us toidentify and compare how the casesmoved from onestage to another. In Table 5, we list definitions of thekey concepts identified in our data analysis, and, inFigure 2, we provide a simplified illustration of howthe grounded analysismaps onto the casehistories inexplaining how the grand challenge of climatechange was translated into “business as usual.”

As we describe in detail in the following sections,the key driver of change among the three stages wascritiques from different stakeholders (such as share-holders and financial analysts, the media, cus-tomers, employees, NGOs, and the public)whodrewupon various market and social/environmental dis-courses in responding to each firm’s climate change

initiatives. Thus, firms initially engaged with cli-mate change in response to the public critique thatbusiness was a key contributor to the climate crisis.These firms sought to overcome the “tension” be-tween the conflicting objectives of business as usualand the grand challenge of climate change by“framing” the issue as business friendly, therebymaking competing interests appear compatible.However, this led to further criticism and new ten-sions in the form of “dissonance” between corporateframings and their local activities andpractices. Thisled to our second stage of translation, “localizing,” inwhich managers created local conventions thatsought to satisfy the opposing goals of businessgrowth and environmental well-being. Creatingroles, practices, and products, however, set in mo-tion an “evaluation” process for these conventions,particularly from a market discourse perspective.This triggered a third stage, “normalizing,” in whichprior initiativeswere purified or dilutedwithin otheractivities to provide clearer commercial returns. Ineach case, we found that themeaning and practice ofcorporate engagement with climate change steadilydiminished and narrowed.

FINDINGS

In the following sections, we summarize key pat-terns and significant events that unfolded between2005 and 2015 in each of the five case study

TABLE 4Data Coding by Stages, Cases, and Time Periods

Coding references n (%)

2004–2006 2007–2009 2010–2012 2013–2015

FramingEnergyCo (2005–2008) 17 (20) 37 (45) 26 (31) 3 (4)FinanceCo (2005–2008) 29 (22) 59 (46) 37 (29) 4 (3)GlobalCo (2005–2007) 34 (28) 49 (40) 36 (30) 2 (2)InsureCo (2001–2005) 63 (74) 15 (18) 7 (8) 0 (0)MediaCo (2007–2008) 0 (0) 42 (75) 14 (25) 0 (0)

LocalizingEnergyCo (2009–2012) 6 (10) 14 (22) 41 (65) 2 (3)FinanceCo (2008–2014) 4 (2) 38 (23) 110 (67) 13 (8)GlobalCo (2007–2012) 14 (8) 56 (30) 102 (55) 13 (7)InsureCo (2005–2008) 81 (74) 12 (11) 12 (11) 4 (4)MediaCo (2008–2011) 0 (0) 21 (20) 76 (72) 8 (8)

NormalizingEnergyCo (2012–2015) 0 (0) 0 (0) 28 (45) 34 (55)FinanceCo (2014–2015) 0 (0) 0 (0) 11 (24) 35 (76)GlobalCo (2012–2015) 2 (2) 3 (4) 18 (22) 58 (72)InsureCo (2008–2015) 0 (0) 32 (52) 16 (26) 14 (22)MediaCo (2011–2015) 0 (0) 0 (0) 7 (24) 22 (76)


organizations. We provide representative support-ing data for the second-order themes of the threestages of framing, localizing, and normalizing, aswell as the tension, dissonance, and evaluation thatthe firms responded to (seeTables 6, 7, and 8, below).The timing andcontent of the three stages differed foreach firm based on specific critiques and pressuresfrom internal and external stakeholders (see Figure 2and Table 5).

Framing Climate Change as a Business Concern

Each of the five companies engaged with the issueof climate change during the early to mid-2000s asa result of different external and public critiques. Forinstance, at EnergyCo, a new cadre of senior man-agers was aware of growing public pressure for low-emissions energy production and the likelihood ofgovernment regulation of carbon emissions in thenear future. Indicative of this change in thinking, in2005, the company commissioned a joint report withan environmental NGO on low-emissions energyproduction. This led the company to focus on di-versifying its energy production portfolio toward

renewable energy sources. In its 2006 SustainabilityReport, thecompanyemphasized that“climatechangeis a critical issue facing us today, and [EnergyCo]accepts the scientific consensus that greenhousegases in our atmosphereneed to be stabilised so as toavoid ‘dangerous’ climate change.”

For FinanceCo, engagement with climate changewasaresponse to recentbankingscandalsandnegativepublic sentiment toward financial institutions. In2005, FinanceCo’s then-CEO joinedwith several othercorporate executives to formaBusinessRoundtable onClimate Change, which commissioned research andadvocated for government action to reducegreenhousegas emissions. Indicative of its growing focus on thisissue, in 2008, FinanceCo released a Climate ChangePosition Statement that asserted: “There is little doubtthat climate change is one of the defining issues of ourtime . . .We believe that climate change will have sig-nificant economic, social, and environmental impactsin the regions where we operate.”

At GlobalCo, climate change formed a central partof the story through which the new global CEOsought to reinvent the company and respond to thefirm’s negative public image as a large, uncaring, and

FIGURE 1Data Structure

First-Order Categories Second-Order Themes Aggregate Dimensions

Association

Disassociation

Incorporation

Commensuration

Proselytization

Purification

Dilution

Framing

Localizing

Normalizing

Business case; Customers; Opportunity;Extreme weather; Future; Innovation;Regulation; Risk; win–win

Not green; Not sacrifice; Not doom andgloom; Not altruism; Not emissions

Eco-efficiency; R&D; new products andmarkets; sustainability functions and roles

Business metrics; Carbon pricing

Green branding and culture;Advocacy

Back to basics; Leadership change;Climate as taboo

Expanded focus; Sustainability;Adaptation


environmentally destructive multinational. Heidentified various “megatrends” that he believedwould be central to the growth of the business intothe 21st century and could provide a more positivepublic image.

We started to look hard at sustainability and climatechange in 2004 when we set up an internal debatebetween two teams of PhDs from our research labs . . .[The CEO] listened to them debate it and concluded,based on the science, that climate change is real andcaused by man.

(GC Global Sustainability Manager, speech, May 2011)

Froma somewhat different angle, InsureCo’s focuson climate change evolved in reaction to shareholdercriticism following a series of storms, bushfires, anda major drought that resulted in significant claimpayouts for the company. The chief risk officerexplained: “We were slowly getting more weather-related events and bigger claims in weather-relatedevents and it was costing us more money.” A newCEO was hired in 2001, and attention shifted to therisks of climate change in upsetting traditionalmodels of insured weather risk. As one of the com-pany’s former sustainability managers recalled,“[The CEO] used to joke about how lucky hewas that

TABLE 5Key Concepts in the Organizational Translation of Climate Change

Concept Definition Application to climate change as a grand challenge

Tension Pressure resulting from engaging with an issue thatposes competing goals and interests for anorganization

How to make the interests of the business compatiblewith the implications of climate change?

Framing Interpreting, defining, and communicating an issue inorder to gain the support of external and internalstakeholders

How to understand the challenge of climate change asa business issue?

Association Ruling in particular understandings when combiningdiscourses

Linking climate change to preferred issues (e.g.,a defined business case), managing risks, andmaximizing opportunities and win–win outcomes

Disassociation Ruling out undesirable features of combineddiscourses

Rejecting certain themes when engaging with climatechange (e.g., sacrifice, the need for regulation, doomand gloom prognoses, or purely environmentalconcerns)

Dissonance Criticisms of the discrepancy between initial framingand practice

How to respond to social/environmental and marketcritiques of the organization’s framing of climatechange as an important business issue?

Localizing Making new framings locally relevant throughconventions that find compromises betweencompeting goals

How to align the challenge of climate change withlocal practices?

Incorporation Developing new roles, capabilities, products, andservices

New sustainability roles, products, and services thatlink business success with environmental well-being

Commensuration Transformingdifferent qualities into a commonmetric Savings from reduced energy consumption, measuresof increased employee engagement, sales figuresfrom new green products and services, carbonpricing

Proselytization Promoting and marketing activities for external andinternal audiences

Employee communications and culture changeprograms,marketingof carbonneutral status, publicadvocacy for emissions trading, alliance buildingwith NGOs and government

Evaluation A further critique of local conventions by evaluatingthe practices in accordance with social/environmental or market discourses

How local responses to climate change satisfy thedemands of shareholder value creation?

Normalizing Realigning practices and activities with dominantorganizational discourses

How to adapt earlier climate change initiatives inorder to maximize shareholder value?

Purification Reemphasizing the local and singular dominantdiscourse

Back to basics approach, winding back of eco-initiatives and climate advocacy

Dilution Broadening the focus and objectives to include otherconcerns

Widening of sustainability efforts beyond climate,including environmentally harmful but profitableactivities


he’d had three 1 in 100 year events in his first sixmonths at [InsureCo]! It just continued to focus thelens on just how important climate change should beto insurers.” (IC01)

At MediaCo, engagement with climate change re-volved around a public event in the United States in2007, where, after hearing from other businessleaders and prominent climate activists, the globalCEO decided “to give the planet the benefit of thedoubt” and announced his company’s implementa-tion of a global energy initiative.

Thus, in each company, senior managers embracedthe topic of climate change largely in response togrowing social andenvironmental criticismof businessactivities, as well as perceptions of a changing regula-tory and physical context. However, engaging with theissue of climate change also highlighted the underlyingtension between existing business models and thechallenge of decoupling economic growth from itsmaterial impacts. In responding to this tension, seniormanagers in each organization engaged in a process offraming to make competing interests appear compati-ble and relevant in their organizational settings.

Senior managers associated climate change withspecific meanings and issues while ruling out more

negative or threateningunderstandings (seeTable 6).For example, at GlobalCo, climate change wasstrongly associated with “innovation,” “customers,”and “opportunity.” As one of the world’s largestmanufacturers of industrial products, GlobalCo’smanagers emphasized how a focus on new cleantechnologies offered a way not only to respond tomarket and regulatory risks, but also to take advan-tage of emerging opportunities. Moreover, this par-ticular framing promoted a vision of returning thecompany to its roots as a source of industrial in-novation, and responded to social and environmen-tal criticismbyhighlighting thepositive social role ofthe company in providing a more environmentallysustainable future for all.

By contrast, at EnergyCo, climate change wasframedby seniormanagers aroundbusiness issues ofregulation and risk. The core narrative focused on thechanging regulatory context in which a government-introduced emissions trading system was keenlyanticipated. Indeed, the company had begun to in-vest in low-emission renewable energy generationin expectation of a shift to carbon trading, and beganto emphasize its future role in transitioning the coun-try toward a renewable energy future.

FIGURE 2Climate Change Translation within Corporations

Acquires windand hydro assets(Jan. 2005)

Positions itself as a leaderin renewable energy generation (2006–2008)

Creates implementationteam for governmentcarbon pricing (Jan. 2009)

Welcomes governmentemissions trading scheme(July 2011)

Purchases coal power stationsmid-2012, argues for reduction of renewable energy targets (Feb. 2014)

Founding member of businessroundtable on climate change(Feb. 2006)

New CEO; ClimateChange Policy Statement(Feb. 2008)

Carbon risk trainingfor investment staff(June 2009)

Carbon trading and pricingof carbon investment risk(July 2012)

Climate change review;focus on “2 degreeeconomy” (June 2014)

CEO announceseco initiative(May 2005)

Expands commitmentto eco R&D (Nov.2007)

Forms eco-tech allianceswith airline and autocompanies (Oct. 2011)

Global head of ecoinitiative resigns(Dec 2012)

Focus on oil sandsand fracking (Dec.2013)

Public advocacyfor climate action(since 2002)

Focus on extreme weatherrisk; founding member ofbusiness roundtable on climatechange (Feb. 2006)

CEO resigns; newexecutive team(May 2008)

Worst year fornatural disastercosts (July 2011)

Focus on “shared value”and disaster resilience(July 2014)

CEO announces energyinitiative at publicevent (May 2007)

125 initiatives toreduce emissions by20% (June 2008)

Criticism for climatedenial messaging(April 2011)

CEO questionsclimate science(Jan. 2013)

Climate initiativerelabeled (Dec. 2014)

EnergyCo

FinanceCo

GlobalCo

InsureCo

MediaCo

Framing: Localizing: Normalizing:

2005 2006 2007 2008 2009 2011 2012 2013 2014 20152010


FinanceCo also associated climate change withrisk and opportunity, based on the likely introduc-tion of government-mandated emissions trading andreputational threats in the form of criticism fromNGOs and community members about the organi-zation’s financing of fossil-fuel developments suchas coal mines and power plants. Rather than shyingaway from an association with climate change, stra-tegic documents at FinanceCo highlighted the lead-ership role it would play in educating customers and

wider society about opportunities in an increasinglycarbon-constrained world.

MediaCo also framed climate change within a riskdiscourse. As the company’s CEO proclaimed inlaunching his company’s climate and energy initia-tive in 2007, “Climate change poses clear, cata-strophic threats. Wemay not agree on the extent, butwe certainly can’t afford the risk of inaction” (MCCEO, Energy Initiative Statement). However, the callfor action was also associated by managers and in

TABLE 6Framing Stage of Climate Change Translation

Organization Enactment Indicative Examples

EnergyCo Tension “It [carbon regulation] has been spotted as a very big risk to our industry.Whatwe’d call internally a ‘slow-burn mega shot.’ Take a long time to turn up;when it does, kerpow! So, once you work out what’s inevitable, then youneed to start preparing for it.” (EC10)

Association (business case) “[EnergyCo] commands significant market leadership in the renewablegeneration space in Australia, with its existing and planned assetspositioned to deliver immediate value upside under a carbon-constrainedenvironment.” (EC press release, March 2008)

Disassociation (reducing emissions) “That kind of response [advocating for renewable energy] is going to have a fargreater impact on the country and theworld’s ability to respond to the issuesof climate change than us putting a target in to reduce emissions by 10%from our power stations.” (EC04)

FinanceCo Tension “Part of the reason why we went down this path was because there wasa realization that we were incredibly out of step with stakeholderexpectations.” (FC01)

Association (leadership) “As a financial institutionwith relationships right across society, wewill playa pivotal role helping our customers, employees, and the broadercommunity shift to this low-carbon economy.” (FCClimateChangePositionStatement, 2007)

Disassociation (sacrifice) “It is easy to dwell on the challenges, but we do believe that there are excitingopportunities for companieswith the courage to reach out and grasp them.”(FC Climate Change Position Statement, 2007)

GlobalCo Tension “My environmental agenda is not about being trendy or moral. It’s aboutaccelerating economic growth.” (GC CEO, 2006)

Association (new opportunities) “Why? Because developing a cleaner, more secure, more efficientinfrastructure isn’t just a responsibility—it’s an opportunity to solve newrequirements for productivity in some of the world’s largest markets; it willdeliverbig results forus and for anyother smart, forward-lookingcompany.”(GC Global Sustainability Manager speech, May 2011)

Disassociation (green) “[Focusingonclimatechange]was toopreciousand it let opponents think that,if you had a green initiative, you didn’t care about jobs.” (GC CEO, 2011)

InsureCo Tension “Whatwill we do?Whatwill happen? Long term, how arewe going tomanagethe risk around? You can’t just extract yourself from those markets.” (IC01)

Association (extreme weather) “We were slowly getting more weather-related events and bigger claims inweather-related events and it was costing us more money.” (IC11)

Disassociation (altruism) “You’re askinghimorher todo something that seems to bealtruistic, andwe’reback in this debate about, ‘Hang on, that’s not our responsibility.’” (IC10)

MediaCo Tension “Our audiences—hundreds of millions of people on five continents—careabout this issue.” (MC CEO, Energy Statement, 2007)

Association (win–win) “Of course it savesmoney. So it has some very positive business side effects aswell as doing the right thing.” (MC08)

Disassociation (regulation) “So far, business has done more than government [on climate change] . . .anything that’s happened in Australia has generally been because businesshas done something.” (MC15)


TABLE 7Localizing Stage of Climate Change Translation


EnergyCo Dissonance “Howdowe best maximize for our customers and for [EnergyCo] the value of the carbonprice?” (EC05)

Incorporation (newproducts and markets)

“We’ve been out there building wind farms, getting a lot of development sites, andworking on that policy response.” (EC04)

Commensuration(business metrics)

“We’d done a lot of in-house analysis, lots and lots of modeling. We’ve got a massivecarbon team that does modeling on the impacts of Carbon Pollution ReductionScheme.” (EC04)

Proselytization (advocacy) “As Australia’s largest energy retailer, we have continually advocated policies thatdeliver increased clean energy production and lower greenhouse gas emissions.” (ECSustainability Report, 2008).

FinanceCo Dissonance “You don’t want to carve yourselves out of something that actuallymakes sense . . . Thatis at odds with the economic outcomes of some of my clients in the mining sector forexample.” (FC09)

Incorporation (newproducts and markets)

“The second part of it is we actually need a bespoke product that will help them throughthis new area or this new transitional period. The carbon forestry is a good example ofthat one.” (FC06)


“When our customers ask, we can point [to] them and say we’re trading carbon. We canexplain how the markets are working. We make a price on carbon and we publisha price on carbon.” (FC13)

Proselytization(green branding)

“One of the single biggest things you can do to—from a reputation point of view—isposition yourself as a leader, have senior people talking about the issues.” (FC03)

GlobalCo Dissonance “I think some people thought it was too soft. GlobalCo’s an edgy company; this is a littlebit of a soft initiative.” (GC CEO, 2008)

Incorporation(eco-efficiency)

“Whilewe’vemade terrific progress reducingour ownenvironmental impact,we’re nowcommitting to make our company twice as energy efficient by 2015.” (GCSustainability Report, 2009)


“As with all initiatives at GlobalCo, we placed bold business metrics around it. Weexecuted against these metrics and delivered.” (GC Sustainability Report, 2009)

Proselytization(green culture)

“We’ve now got groups of employees suggesting new ideas and it’s great for employeebuy-in and it’s great fromanHRperspective of the employee valueposition . . .Youcanget the best people without paying best dollars.” (GC02)

InsureCo Dissonance “We’ve had some quite interesting discussions internally around ethically it might beright to offer X, but, actually, from a profitability perspective, we’re not making somuch money.” (IC07)

Incorporation (R&D) “At present, [InsureCo] is continuing its pioneering hailstorm modelling work andkeeping abreast of any advances in scientific understanding of extreme events andclimate change. Significant investment in research will lead to improvedunderstanding of the changing risk and will help to maintain a viable industry.” (ICClimate Change Report)


“From people selling insurance at branches right through to CEOs, we needed to haveclear [key performance indicators] for everyone on sustainability.” (IC01)

Proselytization (advocacy) “The stuffweweredoingonclimatewas gettinghuge traction.Wherever [theCEO] spokeand I spoke,wewere being pulled into all sorts of newenvironments and communities. . .Wewere talking to the planning industry, wewere talking to the building industry,and governments of all kinds were pulling us in.” (IC10)

MediaCo Dissonance “We realized thatwe couldn’t just go out and say, ‘This iswhat you should be doing,’ andpreaching. We realized that we had to get our own house in order first.” (MC08)

Incorporation(eco-efficiency)

“[MediaCo’s] energy audit program draws on existing management practices, builtaroundour CarbonCouncils,whichhave been established at each business unit.” (MCEnvironment Newsletter, 2010)

Commensuration(carbon off-sets)

“[MediaCo] is nowcarbonneutral, as the greenhouse gas emission data has been verifiedand offsets purchased and retired at the end of 2010 . . . This makes our carbon impactzero.” (MC Environment Newsletter, 2010)

Proselytization (green culture) “At Carbon Council level, where the enthusiasm is, you get a mixture of drivers, fromclimate change being the fundamental thing that young peoplewant to see achieved topeople simply saying, ‘I’m a facilities manager and I want a lower bill on electricity.’”(MC13)


strategy documents with the social role the companywouldplay inpromoting improved energy efficiencyand the business advantages of reduced energyconsumption.

Finally, at InsureCo, climate change was linked tothe specific languageof “extremeweather.”Asoneof

the country’s largest general and commercial in-surers, changing weather patterns were readily un-derstandable within the framing of insurable anduninsurable risk. At the same time, senior managersstressed the social role they could play in providingleadership on climate change action. As the

TABLE 8Normalizing Stage of Climate Change Translation


EnergyCo Evaluation “In an environment impacted by the high cost of capital, shareholder returns asmeasured by underlying profit are increasingly important.” (EC SustainabilityReport, 2013)

Purification (back to basics) “I’m not even worried about climate change and how people perceive us on that.I’mgoing into thiswith amindset of customers need to knowexactly howmuchmoney they’re going to save.” (EC17)

Dilution (expanded focus) “It’s definitely a challenge because it [purchase of a coal-fired power station] isa bit of a change from what we’ve progressed in the past. But there arecommercial arguments about the need to balance out our portfolio . . . being tooheavily geared in specific types of energy—renewables and so forth. So, it’s justabout ensuring that the message is meaningful.” (EC02)

FinanceCo Evaluation “So, some of the business strategies in response to customer needs are playing outdifferently to what we expected.” (FC04)

Purification (back to basics) “I don’t think we necessarily downsized the team, but we put them onto othercommodities of trading. So, some of the lay knowledge is still there, but they’recertainly not actively doing what they were years ago because there’s nomarket.” (FC04)

Dilution (sustainability) “Wesupport the shift to amore sustainable economicmodel that is lessdependenton fossil fuels while recognizing the importance of responsibly managing thetransition to support sustainable economic development.” (FC Climate Policy,2014)

GlobalCo Evaluation “But, when the numbers started not being so good . . . Suddenly, they needed toreduce a lot of corporate costs because the sales weren’t there.” (GC04)

Purification (climate as taboo) “I wasn’t allowed to use the word ‘green’ toward the end.” (GC04)Dilution (expanded focus) “We are believers in the role that technology can play to advance operational

efficiencies and improve environmental performance in oil sands.” (GC pressrelease, Sept. 2015)

InsureCo Evaluation “When you were sitting in strategy, you thought that’s a bit of a stretch of thebusiness to say its sustainability is good business because it’s all aboutsustaining shareholder value and paying dividends in the future.” (IC02)

Purification (leadership change) “I think it was the combination of they lost confidence in his [the CEO’s] ability toget growth out of the business. They associated him too strongly with being anenvironmental climate change leader, and shouldn’t he just be focusing ongetting growth and returns?” (IC01)

Dilution (sustainability) “It was not just around climate change, but it sort of morphed into a sustainabilitymessage and then thatmorphed into awaste reductionmessage. Therewere allsorts of initiatives that people then started to take that basically resulted in thecompany saving money.” (IC11)

MediaCo Evaluation “There are other things now that are far more pressing to people than theenvironment. People are more concerned about the cost of living and howthey’re going to pay their mortgage and how they’re going to afford their bills.”(MC08)

Purification (back to basics) “I don’t see much at all happening right now; at the time, it was great, there wasa lot of push, people were talking about it. But now it’s fizzled pretty well rightoff.” (MC02)

Dilution (expanded focus) “Whatwe’ve talked about for the last sixmonths is howwebroaden [the initiative]to engage broader sustainability issues aside from just climate change, and thatfits with the goals that the [global company] have set us.” (MC13)


company’s former sustainability manager outlined,“The environment became important to us becausesocially it was the driving issue of the community . . .the community was saying, ‘We need leadership onclimate change.’”

However, framing also disassociated climatechange from “doom and gloom” interpretations thatchallenged business growth and corporate expan-sion. In a classic enunciation of the win–win ethos,GlobalCo’s global sustainability manager said, “Ican’t stress this enough. We’re eliminating the falsechoice between great economics and the environ-ment. We’re looking for products that will havea positive and powerful impact on the environmentand on the economy” (GC Global SustainabilityManager, speech, May 2011). Yet, for particularindustry sectors, some framings were seen asmore applicable than others. At EnergyCo (unlikeMediaCo), for example, the link between climatechange and emissions reductions was explicitlyrejected, given the company’s reliance on increasingelectricity usage. As the sustainability managerexplained, “Our goal is to getmore customers, whichmeans we’re selling more energy. So that kind ofemission reduction target isn’t actually the most ef-fective way that we can contribute to dealing withclimate change” (EC04).

Thus, in this initial stage of framing, senior man-agers developed arguments that are common in the“green business” literature: climate change is a stra-tegic business issue providing both business risksand win–win opportunities, and companies havea responsibility as social leaders to respond to envi-ronmental challenges. The framing was producedthrough association and disassociation, by whichactors ruled in particular concerns that were orga-nizationally salient and ruled out alternative in-terpretations that challenged existing businessmodels. As shown in Table 6, these variations wereshaped by each organization’s business and industrycontext.

Localizing the Framing in Practice

While framingwas the first stage in the translationof climate changewithin corporations, new critiquesfrom both market and social/environmental dis-courses created additional tensions and dissonance.Convincing stakeholders of the benefits of “green-ing” initiatives was never assured, and, in somecases, critiques evolved among employees who felttheir organizations’ environmental efforts lackedsincerity. For example, FinanceCo’s sustainability

manager confided that a plan to switch the car fleet tohybrid vehicles provoked employee outrage on thecompany intranet, as it was seen as a form of“greenwashing”: “So, yes, they [employees] defi-nitely holdus to account.They’re our toughest criticsby far.” (FC01)

The dissonance between the framing of climatechange and corporate practices was also critiqued inmarket discourses. For instance, at GlobalCo, thedecision to address climate change through “green”innovation led to significant criticism from thecompany’s board of directors and major industrialcustomers. As the local sustainability manager re-flected, “[The CEO] certainly got resistance fromcustomers and others around the place, because itseemed very green . . . there were some that weren’tpleased about it” (GC02). FinanceCo faced similarcriticism from corporate clients in the fossil fuelsector, who objected to the company’s advocacy forcarbon pricing. The head of energy project financeexplained: “So, the coal mining sector’s been reallyhard on the banks in terms of positions we make oncoal. So, there are industry groups with vested in-terests that are clients of ours, andwehave tomanagethat conflict.” (FC09) Broadly speaking, managersfrom more operational parts of these businessesobjected to the focus on climate change as a distrac-tion from core business.

Senior managers responded to critiques by re-iterating earlier interpretations of climate changeand seeking tomake initial framings locally relevant.They highlighted practices that provided a tempo-rary compromise between the competingmarket andsocial/environmental discourses. As outlined inTable 7, in this localizing stage of the corporatetranslation of climate change, the purpose of in-corporation, commensuration, and proselytizationwas to make climate change real and tangible foroperational managers through everyday businessactivities.

Incorporation. A first step in the localization ofclimate change in the five caseorganizations involvedtranslating the corporate acknowledgment of climatechange into more tangible practices and activities,including, for instance, focusing on the developmentof new products and services. For example, at Glob-alCo, helping “our customers to tackle their mostpressing environmental challenges” found ready ex-pression in the development of new “cleantech”products such as wind turbines, solar technologies,and more efficient energy generation.

Beyond a focus on new products and markets, in-corporationalso involvednewactivities that improved


eco-efficiency by reducing greenhouse gas emissionsand energy usage. This was apparent at MediaCo,where the CEO’s initial focus on climate change as anemerging threat was quickly translated to cutting thecompany’s carbon footprint and achieving carbonneutral status. The resulting organization-wide pro-gram of eco-efficiency focused on employees findingways to change production processes in order to re-duce carbon emissions.

A further theme in incorporating climate changeinto practice was the emphasis companies placed onissues of innovation and research and development.Viewing climate change as both a risk and an op-portunity drove companies to invest in developingnew capabilities that would enable them to betterprepare for future possibilities. For instance, Insur-eCo employed climate scientists and technical ex-perts to model future weather patterns and researchthe resilience of building construction to threatssuch as hailstorms and bushfires.

Likewise, specialist sustainability roles and func-tions were created to oversee new activities andpractices. At FinanceCo, a central sustainabilityteam oversaw emissions reporting and provided ex-pert advice on climate risks and opportunities todifferent operational areas, such as investmentbanking. A similar model of specialization was evi-dent at EnergyCo, where sustainability managers ledthe company’s investment in renewable energyprojects, crafted climate-related internal and exter-nal communications, and advised senior managersonpotential regulatory changes in emissions trading.

Commensuration.Havingmade the link betweenclimate change and established business activities,a second element of localizing stressed how thesepractices could be assessed as meaningful mea-sures of corporate value. As noted above, a com-mon practice focused on eco-efficiency andreducing energy usage, which could be readilytranslated into cost savings. However, commen-suration also involved new measures of corporatevalue. For instance, at FinanceCo, an internal priceon carbonwas developed by a project team to factorin the likely future regulatory charge of a certainnumber of dollars per ton of carbon emissions. Thismetric was then used in investment decisions andglobal markets where carbon trading was alreadyestablished.

While commensuration took diverse forms acrossthe five organizations (e.g., savings from reducedenergy consumption, measures of increased em-ployee satisfaction and engagement, sales figuresfrom new “green” products and services, and carbon

pricing), managers were careful to emphasize spe-cificmetrics that could justify the investment of timeand money in climate change-related activities,specifically in response to market critiques. AsGlobalCo’s local CEO confided, “I’m going to be realfrank here—we’re not doing this to save the planet.That’s not the driver. We’re industrialists.” (GC10)

Proselytization. Having identified various activi-ties, practices, products, and metrics for corporateengagement with climate change, a third element oflocalizing involved communicating these practicesand justifying them to a diverse range of stake-holders. Such proselytization took various forms.For instance, atMediaCo, the focus on eco-efficiencyresulted in a branded company-wide communica-tion strategy and culture change program that pro-claimed that “everybody can make one degree ofdifference.” This was combined with the creation of“carbon councils” among the company’s differentbusiness units, and staff competitions for improvingenergy efficiency. As the company’s environmentmanager explained, “That inspires others and it getsthings done. It’s a fantastic tool. It’s how behavioralchange happens on sites” (MC15).

Proselytization also involved engagement withexternal stakeholders, such as customers, clients,NGOs, and political parties. This was particularlythe case at EnergyCo and FinanceCo,where the issueof regulatory change had major business implica-tions. Both of these firms became strong advocatesfor the government introduction of an ETS, whichthey viewed as critical to providing business cer-tainty for future investment. They communicatedthis policy stance through workshops, conferences,and external publications. A sustainability managerat EnergyCo explained, “We’ve been advocating re-ally strongly for things like the Renewable EnergyTarget, really, really strongly for the CPRS [CarbonPollution Reduction Scheme] where a lot of ourcounterparts are silent” (EC04).

Thus, throughout this second stage of localizing,managers sought to align their initial framings ofclimate change with more specific business activi-ties and practices. As outlined in Table 7, while thefive case organizations varied in their emphases,each enacted elements of incorporation, commen-suration, and proselytization. Through these activi-ties, corporations could respond to accusations ofdissonance or greenwashing by identifying sub-stantive changes in business practices and high-lighting how these practices appeared to bothprovide sound business returns and respond toa pressing social and environmental challenge.


Normalizing Corporate Practices

Localizing the framing of climate change enabledcorporations to respond to both market and envi-ronmental critiques. However, shifting businessfortunes, internal corporate politics, and changes inexternal political discourses resulted in further crit-icism. Unlike in earlier stages, market discoursesbecame more dominant, leading to focused evalua-tions and tests of earlier corporate climate commit-ments. In particular, shareholders, managers, andfinancial analysts increasingly questioned the abilityof localized activities and practices to satisfy marketinterests (e.g., reduced costs, increased revenue andprofitability). These evaluations led to a new stage oftranslation that we have termed “normalizing.” Inthis stage, the temporary compromise between mar-ket and social/environmental discourseswas brokenand corporate executives sought to realign climateinitiatives with the dominant market discourse ofmaximizing shareholder value.Within this stage, weidentified two principal activities: purification anddilution (see Table 8).

Purification. One response to the market critiqueof corporate climate initiatives involved strippingback earlier climate change commitments andreemphasizing the need to respond to traditionaldrivers such as profit growth, cost reduction, andmaximizing returns to shareholders. For example, in2008, as a result of a failed overseas expansion,stagnant growth, and a falling share price, share-holder criticism led to the resignation of InsureCo’sCEO and the installation of a new executive team toturn the company around. The earlier compromisethat climate change actions would pay back interms of market outcomes had been evaluated andfound lacking. The new CEO expressed skepticismabout the company’s climate change advocacy, andstressed the need to “get back to basics.” As one ofthe company’s former sustainability managersrecalled, “So, yeah, it was a total refocus . . . Linkingit more to the financials, and removing ourselvesfrom the industry bodies around climate change”(IC01). Another former executive described thechange in the company’s attitude on climate asfollows: “Look, that was all a nice thing to have ingood times, but now we’re in hard times. We getback to core stuff.” (IC10)

Internal restructuring and purification was alsoevident at GlobalCo,where reduced growth forecastsand stagnating sales resulted in major cost cuts in2012 and a reassessment of the focus on renew-able energy and “cleantech” products. Once again,

internal criticismof thecompany’s eco-initiative andturnover of key senior managers who had champ-ioned the climate focus led to a winding back ofearlier initiatives. The former sustainability leaderexplained, “It has always been a ‘sell your productevery quarter’ sort of company . . . But we lost thecompany officer leading it; it lost its profile and nowthe website’s gone” (GC04).

Beyond changing corporate fortunes and the fail-ure of climate initiatives to demonstrate clear fi-nancial returns, purification was also driven bybroader changes in the external political discourse.During the period 2010–2013, in response to a fer-vent public campaign by conservative politicians,industry lobbyists, and right-wing media againstcarbon pricing and climate change action, manycorporations stepped back from the public spotlighton this issue. For many managers, climate changebecame controversial, with attendant reputationalrisks. At the height of the political debate, the head ofgovernment relations at FinanceCo explained: “Howwe deal with sensitivities within the organizationabout taking what can be seen as a partisan positionin a highly political environment . . . that’s the chal-lenge at the moment.” (FC10)

Indeed, the changed political context toward cli-mate action coincided with corporate leadersrecanting their earlier advocacy on the issue. AtMediaCo, the company’s CEO now publicly ques-tioned climate science and the urgency of climatechange, while media observers noted the increasingintensitywithwhich the company promoted climatechange skepticism in its publications. Decliningpublic concern over climate change appeared to re-duce the business case for engaging with the issue,and indeed the company’s publications nowappealed to growingpublic skepticismabout climatechange as a source of sales.

Dilution. Beyond just a narrowing of corporatefocus on shareholder value, normalizing also in-volved enmeshing the earlier attention to climatechange within a broader range of concerns. We la-beled this process “dilution” and itwas evident in allof our case organizations as a response to thechanged external and internal discourses on climatechange. For instance, at GlobalCo, dilution was ap-parent in the recalibration of the company’s eco-innovation focus to include fossil fuel industries,such as hydraulic gas fracturing (i.e., “fracking”) andtar sands extraction. Rapid global growth in theseindustries provided significantmarkets for GlobalCoproducts, and the company characterized its in-volvement in these industries as away of continuing


to solve “tough environmental challenges” by im-proving efficiency (GC Fact Sheet, 2014). As onesenior manager explained, “We are pointing moreR&Ddollars towardnatural gas. Reallymaking surethat we have the social license to operate, thatwe are working on tough problems around gas”(GC05). Despite criticism from environmentalNGOs that these fossil fuel industries contribute toincreased greenhouse gas emissions, companyexecutives defended their new positions by argu-ing that their focus was broader than just climatechange.

A similar trend was evident at EnergyCo, which,despite its earlier focus on renewable energy gener-ation, in 2012, purchased the country’s largest coal-fired power plant at a reduced price, expanded itsinvestments in coal seam gas production, and laterargued against renewable energy targets. Dilutionwas also evident at MediaCo, where the focus on“carbon” and “climate” became less apparentwithina broader focus on “environment,” “waste re-duction,” and “water use.” The company’s sustain-ability manager explained: “We’ve broadened whatwe do. It’s no longer confined to just an energy andcarbon focus.” (MC14) In widening the scope ofcorporate initiatives to “sustainability,” the earlieremphasis on climate change dissipated in favor ofmore immediate and profitable concerns. Indeed, insome cases, the term “climate change” disappearedaltogether from corporate reporting. The sustain-ability manager at InsureCo commented: “In fact, ifyou look at our sustainability report, I challenge youto find thewords ‘climate change’ . . .You know, a bitof a cop-out.” (

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