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r Academy of Management Journal 2017, Vol. 60, No. 5, 1633–1661. https://doi.org/10.5465/amj.2015.0718

AN INCONVENIENT TRUTH: HOW ORGANIZATIONS TRANSLATE CLIMATE CHANGE INTO BUSINESS AS USUAL

CHRISTOPHER WRIGHT University of Sydney

DANIEL NYBERG University of Newcastle

Climate change represents the grandest of challenges facing humanity. In the space of two centuries of industrial development, human civilization has changed the chemistry of the atmosphere and oceans, with devastating consequences. Business organizations are 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 this paper, we examine how businesses respond to climate change. Based on five in-depth case studies of major Australian corporations over a 10-year period (2005–2015), we identify 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 comfortable concerns of “business as usual.” We find that critique is the major driver of this process by continuously revealing the tensions between the demands of the grand challenge and business imperatives. Our paper contributes to the literature on business and the natural environment by identifying how and why corporate environmental initiatives de- teriorate over time. More specifically, we highlight the policy limitations of a reliance on business 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 Union Address, January 20, 2015

Of all the challenges facing humanity, none is more profound than anthropogenic climate change. Through the increasing consumption of fossil fuels for energy and transportation and the degradation of carbon sinks such as forests and oceans, the Earth’s climate has already warmed on average by 1� Celsius from preindustrial levels (Mann, 2014). Recent analysis by the Intergovernmental Panel on Climate Change (IPCC) suggested the world is on track for a global average temperature increase of 3� to 5�

Celsius by the end of the century, with much of this warming locked in as early as 2020–2030 (IPCC, 2013). Environmental change of this kind is un- precedented for our species, and climate scientists argue that such a future is likely to be incompatible with human civilization (New, Liverman, Schroeder, & Anderson, 2011). Indeed, the current trajectory of global emissions presents an unimaginable future of large tracts of the Earth rendered uninhabitable, the collapse of global food production, mass species ex- tinction, the acidification of the oceans, dramatic sea level 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 and management theory, in that both the causes and possible solu- tions to climate change derive from our globalized economy and the corporations that underpin it (Howard-Grenville,Buckle,Hoskins,&George, 2014). Corporations are central to the characterization of climate change as a “wicked” (Rittell & Webber, 1973; Wijen, 2014)orevena“superwicked”(Lazarus,2009; Levin, Cashore, Bernstein, & Auld, 2012) problem. For instance, time is rapidly running out as regards avoiding dangerous climate change, yet corporations

We would like to thank Jennifer Howard-Grenville for her outstanding editorial guidance and the three anonymous referees for their constructive feedback in helping to de- velopthispaper.Wewouldalsoliketothankmembersofthe University of Sydney and University of Newcastle business schools for their input on earlier versions of the paper. Fundingfor theresearch upon whichthis paperisbasedwas provided by the Australian Research Council (Discovery funding scheme, project number DP110104066).

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havehistoricallylobbiedagainstemissionsmitigation and delayed action (see, e.g., Helm, 2010; Kolk & Pinkse, 2007; Levy & Egan, 2003). Further, while corporations are commonly presented as the best agents to respond to climate change (Garnaut, 2008; Stern, 2007), many of the world’s major corpora- tions have been the most significant contributors to humanity’s escalating carbon emissions (Heede, 2014). However, despite the criticality of organiza- tional responses to climate change, this is a topic that has 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 scholarly field 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 by pressure and critique from regulators and competitors as well as internal champions and external entities such 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 “corporate environmentalism,” 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 framings are turned into environmental practices (Bansal & Roth, 2000; Sharma, 2000), and how managers can cognitively uphold these competing demands (Hahn, Preuss, Pinkse, & Figge, 2014) or tensions (Van der Byl & Slawinski, 2015). However, the notable lack of progress in reducing carbon emissions suggests that firms struggle over time to practically deal with such grand challenges.

To further understand how firms respond to social and environmental grand challenges, we utilize a longitudinal approach, analyzing the process through which competing demands are interpreted and enacted in response to stakeholder critique and pressure. This, we argue, involves a continuous process of “translation” in which organizational ac- tors make sense of potentially challenging ideas and concepts, negotiate their meaning, and adapt them for particular situations and contexts (Czarniawska & Joerges, 1996). From this perspective, ideas are not fixed, 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 as creating new meanings through association (Callon, 1986). Understanding the process of translating grand challenges into practice is critical, as this may guide the establishment of new forms of organization and governance arrangements that help address so- cial and environmental concerns. This is particu- larly pertinent for long-term, complex challenges such as climate change, wherein corporations face conflicting and changing criticism from a range of different stakeholders.

In exploring how organizations respond to climate change over time, we undertook five in-depth case studies 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 these firms 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 to prevailing discourses of profit maximization and “business as usual.” To explain this environmentally regressive pattern, we developed a model that shows how the translation of grand challenges into corpo- rate practices involves a dialectical process of responding to critique or criticism that continuously reveals the tensions associated with competing de- mands. We highlight the various stages through which grand challenges are translated within cor- porate settings, and identify how, over time, con- tinuous critique and reassessment results in compromise in favor of a narrow profit motive.

Our study makes several contributions. First, as an in-depth empirical study of different corporate re- sponses to climate change, we illustrate how grand challenges are translated to align with more domi- nant business discourses and practices. Continuous critique of competing demands eventually purifies dominant market discourses and dilutes climate change concerns. Second, our comparative and longitudinal perspective enabled us to develop a model to explain how diverse strategies and tactics in different firms produce similar outcomes. This explains the limitations of corporate engagement with grand challenges, and how this engagement supports dominant market discourses. Third, we balance overly positive or cynical views of manage- rial responses to social and environmental concerns with a model explaining how managerial framings

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and initiatives are continuously challenged by ev- eryday market evaluations. Finally, we identify and explain the limitations of business corporations’ engagement with grand challenges due to the wick- edness of these problems. We argue that corporations are particularly ill-suited to address climate change, since their short-term objectives and reliance on growth and political interventions inflate the super- wickedness of the issue. Ourfindings have important policy implications for those promoting a reliance on market mechanisms and business leadership as the dominant response to climate change. Echoing Al Gore (2006), our paper addresses “an inconvenient truth” for management scholars: the folly of over- dependence on corporations and markets in addressing one of the gravest threats to our future.

CORPORATIONS AND THE NATURAL ENVIRONMENT

Since the 1960s, corporations have faced in- creasing criticism from a range of stakeholders over environmental problems caused by economic de- velopment (Hoffman, 2001; Hoffman & Bansal, 2012). Opposing demands from economic and en- vironmental discourses have acted as a central driver for corporate change (Hart, 1995), as stakeholder critique and the threat of regulation have triggered corporate environmental activities (Hoffman, 1999). Many corporations have responded to this tension through what Jermier et al. (2006: 618) referred to as the “new corporate environmentalism” (NCE), de- fined as “rhetoric concerning the central role of business in achieving both economic growth and ecological rationality as a guide for management that emphasizes voluntary, proactive control of envi- ronmental impacts in ways that exceed or go beyond environmental laws and regulatory compliance” (emphasis in original). This has resulted in activities such as improving eco-efficiency to reduce energy consumption and operational costs, increasing sup- ply chain efficiency, identifying new products and services to satisfy changing market and social de- mands, and “green” marketing to better attract and retain employees and build stronger customer re- lationships (Hart, 1995; Porter & van der 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 business paradigm and argues that corporations can address environmental problems and improve competitive performance, resulting in a so-called “win–win”

outcome (Fremeth & Richter, 2011; McWilliams & Siegel, 2010). Managers respond to environmental critique by signaling the importance of environ- mental concerns to internal and external stake- holders and framing the issue within a defendable business rationale (Bansal & Roth, 2000; Sharma, 2000). Through strategic framing, managers filter and construct contextual information into a strategy process by including certain aspects of the demands andexcludingothers(Bundy,Shropshire,&Buchholtz, 2013; Hahn et al., 2014). The communicated framing of environmental issues as a threat or an opportunity gathers support and directs new activities (Kennedy & Fiss, 2009). Corporate leaders ensure that the framing is locally enacted by creating specific environmental roles that provide a legitimizing effect (Bansal & Roth, 2000; Howard-Grenville & Bertels, 2012), and envi- ronmental “champions” convince others within the firm of the importance of environmental issues in meetings and on committees (Andersson & Bateman, 2000).

Despite the general optimism in this normative approach, evaluations of NCE recognize the tensions that result from the opposing demands of economic and environmental goals. Scholars have pointed out that, when “pressed to choose between financial goals and societal goals, firms will normally favor their financial goals” (Van der Byl & Slawinski, 2015: 58), thus eliminating the tension between opposing demands (Smith & Lewis, 2011). To avoid this re- gressive process, scholars have recently emphasized how 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 combining economic and environmental concerns (Gao & Bansal, 2013; Hahn et al., 2014). In the former in- tegrative approach, the firm’s economic focus is counterbalanced by placing greater emphasis on the environment, while the latter juxtaposing approach requires continuous stakeholder management and negotiation. However, as Van der Byl and Slawinski (2015) pointed out, there is limited knowledge of how firms integrate or balance competing environ- mental and economic concerns. Beyond the lack of empirical studies, it is not clear conceptually how firms that are continuously facing competing in- ternal and external criticism manage the tensions that come with complex challenges.

The second, critical approach in evaluating NCE concludes that firms ultimately cannot manage these tensions; the market–environment conflict is seen as fundamental and cannot be upheld within the

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corporate world (Banerjee, 2003). Scholars within this critical approach argue that the natural envi- ronment fails to be enacted within organizations beyond an immediate profit motive (Fleming & Jones, 2013; Levy, 1997; Newton & Harte, 1997), resulting in a trade-off in which the market trumps environmental well-being (Nyberg & Wright, 2013; Starkey & Crane, 2003). A first level of critique in this respect relates to the way in which such initiatives merely provide the appearance of environmental benefit (i.e., “greenwashing”) (Bowen, 2014; Lyon & Montgomery, 2015). In this view, NCE papers over the dissonance between the rhetoric and the reality of corporate greening, maintaining social legitimacy by placating concerned consumers and forestalling environmental regulation (Newton & Harte, 1997; Prasad & Elmes, 2005).

More substantively, however, others argue that corporate initiatives such as greener supply chains and “carbon neutrality” are driven by more basic business goals of cost reduction, productivity im- provement, and market expansion (Dauvergne & Lister, 2013). Corporations invest in these programs not 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 that distract from the revolutionary changes actually re- quired to address serious systemic environmental challenges. While compromise between the interests of the market and the environment may result, the continuous 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 the role of senior managers in strategically framing the meaning of an issue toward a preferred interpreta- tion. Through strategic framing of an issue, managers interpret and construct a particular version of reality to internal and external audiences (Fiss & Zajac, 2006; Kaplan, 2008; Kennedy & Fiss, 2009). They shape the meaning of the issue by promoting firm responses corresponding to their interests and values (Sonenshein, 2016), and legitimize decisions and activities implemented in the firm (Vaara & Tienari, 2008). However, while there is literature on the 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 within organizational settings (Andersson & Bateman, 2000; Howard-Grenville, 2007), we know far less about the process through which firms reconcile competing demands from divergent stakeholder groups as they create and maintain frame-aligned local practices.

Further, beyond initial managerial framings, it is important to understand how organizations respond to stakeholder critiques and pressures over time. External and internal actors are active agents (Cornelissen & Werner, 2014), with environmental practices 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 with the grand challenge—from initial framings to implementation of practices and evaluation of their success and failure. As a result, while corporate leaders may initially use framing to manage tensions between market and environmental discourses, the process through which framing informs practice and is upheld by involved actors in subsequent evalua- tion of environmental practices remains unclear. Accordingly, the guiding research question for this paper is as follows: How do firms engage over time with competing demands in translating complex social and environmental challenges into practice?

THE WICKEDNESS OF CLIMATE CHANGE

Unlike most challenges that businesses face, climate change has become a highly charged and partisan po- litical issue intertwined with deeper ideological and culturaldivisions(Hoffman,2015; McCright&Dunlap, 2011). For instance, discussions about climate change in 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 change movements or political parties that oppose action on climatechange(Sonenshein,DeCelles, &Dutton, 2014; Wright, Nyberg, & Grant, 2012). Corporate actors can expect to simultaneously face criticism for supporting as well as opposing action on climate change. This polarized debate also fuels the external volatility that influences corporate responses as they seek to align conflicting stakeholder positions.

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

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corporate responses to it. First, time is rapidly run- ning out if humanity is to avoid dangerous climate change (Anderson & Bows, 2011; IPCC, 2014). This temporal aspect is important, in that corporations alone cannot deal with the increasingly costly problem, especially not within quarterly or yearly reporting timeframes. Rather, climate change re- quires long-term strategies beyond the commitments of individual leaders and champions. It is therefore crucial that corporate climate change initiatives have longevity beyond their initial framings.

Second, while corporations are often viewed as the entities in the best position to address climate change throughtechnologicalandmarketinnovation(Garnaut, 2008; Stern, 2007), they are also major contributors to climate change. Corporations represent 40% of the world’s largest economic entities, with both revenues and greenhouse gas emissions dwarfing many national economies (Heede, 2014; Patenaude, 2010). In a global economy based on economic growth and fossil fuel- based energy, corporations have limited incentives to undertake radical decarbonization, and have resisted attempts to legislatively restrict emissions (Kolk & Pinkse, 2007; Levy & Egan, 2003). Internal champions are often left to argue against the maximization of short- term profit that typically drives firm decision-making (Wright et al., 2012).

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

Each of these features renders the process of translating climate change into strong corporate re- sponses particularly difficult, since doing so requires purposeful dedication to a strategy in the face of competing critiques in an uncertain environment. In order to better understand how businesses respond to the grand challenge of climate change, we explore how firms engage with competing demands in translating this challenge into practice.

RESEARCH SETTING AND METHOD

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

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

As outlined in Table 1, from 2005–2015, an in- creasingly partisan political debate raged in Aus- tralia over climate change. By 2005–2006, opinion polling revealed that it had become a primary area of public concern, and political parties explored policy responses such as carbon pricing. A change in gov- ernment in2007highlighted thispolicyshift,withthe incoming Labor government led by Prime Minister Kevin Rudd finally ratifying the Kyoto Protocol and committing to the introduction of a carbon emissions trading scheme (ETS). This policy focus coincided with unprecedented extreme weather events, in- cluding the “Black Saturday” bushfires in Victoria in February 2009 in which 173 people lost their lives (Head, Adams, McGregor, & Toole, 2014).

However, failure to reach a global agreement at the 2009 United Nations Climate Change Conference in Copenhagen, conservative political opposition, and growingresistancefrom industry ledto the deferral of emissions trading. Narrowly holding on to power in the 2010 federal election, the minority Labor gov- ernment under Prime Minister Julia Gillard an- nounced the introduction of a fixed carbon price as a prelude to a carbon trading system (Commonwealth of Australia, 2011). Opposition political parties, with backing from the media, right-wing think tanks, and industry groups, launched a highly effective public campaign against what was dubbed a “toxic carbon tax” (Manne, 2011). This proved to be a key factor in the defeat of the Gillard government in the 2013 election, after which, under the conservative leader- ship of Prime Minister Tony Abbott, climate policies were disbanded and Australia became the first developed nation in the world to abolish a price on carbon emissions.

Within this fractious political context, Australian businesses sought to navigate not only the uncertain regulatory context around carbon pricing, but also the risks and opportunities that might come from moving toward a future low-carbon economy. Com- panies that had previously taken widely divergent

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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 in responding to climate change (for a summary, see Wright & Nyberg, 2015). Through interviews with executives, specialist managers, industry groups, and consultants in a range of large Australian cor- porations, we identified how business responses to climate change involved both external political en- gagements (Nyberg, Spicer, & Wright, 2013; Wright & Nyberg, 2014) as well as internal strategies and practices aimed at improving eco-efficiency, devel- oping new products and services, green workplace cultures, and marketing themselves as environmen- tally responsible organizations. The initial focus of the project centered on how individual actors (Wright & Nyberg, 2012; Wright et al., 2012) and firms (Nyberg & Wright, 2012, 2013, 2016) struggled with the challenge of climate change.

However, an emerging theme from our earlier re- search was how initially strong corporate engagement

with the issue of climate change dissipated over time as contextual and internal dynamics changed. This led to a new research focus; specifically, how corpo- rations engaged longitudinally with social and envi- ronmental challenges in response to competing pressures. To more fully explore this temporal adap- tation in corporate climate response, we expanded our earlier research and focused specifically on five firms as longitudinal and comparative case studies. This involved extending our data collection by con- ducting follow-up interviews with key informants in eachorganizationtocapturerecentdevelopmentsand relate back our earlier findings, and gathering archival data and a comprehensive collection of media re- leases from each organization over the time period of our investigation. This additional data collection allowedustocreatefivein-depthcasestudiesof major Australian corporations from different industries over a 10-year period (2005–2015). In responding to the new research focus, we conducted a new process of comparative data analysis, from which we developed a model of the corporate translation of grand chal- lenges over time.

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

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

Date Developments

Nov. 24, 2007 Federal election: An Australian Labor Party government led by then-Opposition leader Kevin Rudd is elected Dec. 12, 2007 Australia ratifies the Kyoto Protocol Sept. 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 change May 14, 2009 ETS legislation introduced into Parliament Dec. 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 action Feb. 2, 2010 ETS legislation is rejected in Parliament Apr. 27, 2010 Government delays the introduction of carbon pricing until the end of 2012 Aug. 21, 2010 Federal election: The Australian Labor Party, led by Prime Minister Julia Gillard, retains power in a minority

government alliance with three independent MPs and one Australian Greens MP Dec. 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 links Nov. 8, 2011 ETS legislation passed by Parliament July 1, 2012 Carbon pricing comes into effect Jan. 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/National Coalition wins and assumes power under then-Opposition

leader Tony Abbott Sept. 19, 2013 Abbott Government abolishes the Climate Commission Nov. 13, 2013 Abbott Government introduces repeal bill for ETS and carbon pricing Jan. 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: ETS 5 emissions trading scheme.

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(hereafter, “EnergyCo”), a major financial services company that was factoring a price on carbon into its corporate lending (“FinanceCo”), a global manufac- turer that was reinventing itself as a green producer of renewable energy technologies (“GlobalCo”), a large insurer focused on the financial implications of ex- treme weather events (“InsureCo”), and a global media company that had embarked on an eco-efficiency drive to become carbon neutral (“MediaCo”). The cases were theoretically sampled for their strategic engagement with climate change (Yin, 2003), and from different industries to yield more generalizable explanations of patterns and relationships across the cases (Eisenhardt & Graebner, 2007). This strategic focus helped us for- mulate a theoretical explanation of the process, and the companies’ 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 each company, which resulted in an extensive collection of textual data (see Table 3). To provide contextual detail for the longitudinal analysis in this paper, we extended the document data collection back to 2000, in order to trace changes in corporate leadership and understand 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, we performed semi-structured interviews with a range of managers from the five corporations, including sustainability specialists, senior managers, and op- erational managers (see Table 3 for details). We interviewed members from each organization during the period 2010–2014 in order to understand change and continuity in organizational practices and thinking. During these interviews, we asked each re- spondent to reflect on the historical context of the company’s engagement with climate change before exploring the company’s current climate change re- sponses. For the longitudinal and comparative

TABLE 2 Corporate 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 emitters c Rebranded itself in 2005 as a “green” energy company c Invested in renewable energy generation (hydro, wind, and solar) to supplement aging coal-fired power stations

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

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

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

GlobalCo Manufacturing 5,600 c NewglobalCEO launcheda focusoneco-innovationin 2004 c Established targets for eco-innovation R&D, sales from eco- products, and reductions in carbon emissions and water usage

c Developed eco-innovation challenges with partner organizations

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

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

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

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

c Implemented a culture change initiative aimed at achieving carbon neutral status

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aspect, we conducted 10 follow-up interviews with key informants during 2015 to relate back our find- ings to case study participants and confirm the latest developments in each organization (for a total of 70 interviews). Each interview lasted between 50 and 120 minutes and was recorded and fully tran- scribed, providing a rich and extensive source of qualitative data (amounting to more than 1,620 pages of transcript).

In building each case study, we also accessed an extensive range of private documentation, including corporate strategy and policy documents, Power- Point presentations, communications, training doc- uments, and submissions to the government on proposed carbon regulation. In order to understand how the five cases responded to external pressures in regard to their activities, we conducted a compre- hensive search of all media releases from the five

TABLE 3 Data Source Material

Organization Interviews Documents

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

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

FinanceCo 14 interviews; 350 pages of transcript Sustainability reports, 2007–2014; Carbon Pollution Reduction Scheme submission; financing sustainable energy; climate change policy documents (28 documents; 295 pages); media releases (52 documents; 65 pages)

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

GlobalCo 10 interviews; 157 pages of transcript Eco-products annual reports, 2008–2013; marketing and 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 Leader AUS/NZ; 04 former Head of Eco-Products AUS/NZ; 05 Global Director, Eco-Products; 06 Smart Grid Business Leader; 07 Corporate Communications Director; 08 Vice Chairman; 09 Vice President, Operations; 10 CEO AUS/NZ

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

01 former Sustainability Manager; 02 former Strategy Director; 03 Senior Advisor, External Relations; 04 former Director; 05 Manager, Natural Perils; 06 Senior Specialist, Sustainability; 07–08 Business Sustainability Manger; 09 former Sustainability Research Manager; 10 former Group Executive, Culture & Reputation; 11 former Chief Risk Officer

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

01 Editorin Chief; 02 Press Crew Supervisor;03 Managing Editor; 04 General Manager; 05 Procurement Manager; 06 Creative Director; 07 Human Resources Director; 08 Director of Corporate Affairs; 09 Group Organization Development Manager; 10 Human Resources Manager; 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

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

Data Analysis

The first stage of data analysis involved a detailed reading of the collected textual material (interview transcripts, corporate documents, and media re- leases) across the five cases. Through this process, we developed case histories and timelines of the organizations and their climate change practices, which we compared with the recent history of Aus- tralian and international climate policy. As we mapped key dates and milestones over time, two consistent themes emerged across the cases: (1) ini- tially, companies made strong and diverse commit- ments to address climate change, and (2) their efforts waned over time into “business as usual.” As we delved into the B&NE literature to understand these emerging themes, we found explanations for corpo- rate engagement with climate change, but limited explanations concerning how strong commitments are incorporated yet eventually dissipate within conventional business practice.

During the second stage of the data analysis, we returned to the empirical material and performed a process of “open coding” (Corbin & Strauss, 1990). Using the qualitative data analysis software NVivo (QSR International), we coded for empirical themes around the practices, strategies, narratives, and dis- courses we had identified in the text. Initially, the process of labeling terms and phrases in the empiri- cal material was performed “in vivo” (Locke, 2001). After reading the data multiple times, we combined segments of text reflecting similar wordings or ac- tivities into first-order categories, resulting in the classification of more than 60 primary nodes. These nodes 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 and markets”), and changes in approach (e.g., “back to basics,” “expanded focus,” and “leadership change”). Building from these initial first-order codes, we then coded for similarities and differ- ences across the five cases to discern the main cate- gorization of climate change in the empirical material.

In the third stage, we used second-order or axial coding to search for patterns and relationships within and between the first-order categories and the case studies (Strauss & Corbin, 1998). We combined the categories into themes explaining how they re- lated to corporate activities and practices across the five cases. Through this analysis, we arranged the nodes we had identified in our initial open coding within broader, conceptually informed categories. We identified a range of higher-order concepts re- lated to the different processes and practices through which companies engaged with climate change, in- cluding ruling particular understandings of climate change in or out (“association” and “disassocia- tion”), developing roles, products, and services (“incorporation”), transforming different qualities into a common metric (“commensuration”), promoting and marketing eco-business activities (“proselytiza- tion”), reemphasizing the dominant discourse of value creation (“purification”), and broadening cor- porate sustainability objectives beyond climate change (“dilution”).

In the fourth stage, we applied these concepts back to our case histories of the five organizations in order to discern how corporate responses to climate change 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 the first stage, “framing,” senior managers acted as in- terpreters, defining climate change as an important issue for their organizations that was compatible with their business interests. The second stage, “lo- calizing,” involved senior and middle managers making new framings locally relevant by aligning the challenge of climate change with local practices. The third stage, “normalizing,” involved decision- making throughout the firms that realigned earlier climate change initiatives with the dominant orga- nizational discourse of maximizing shareholder value. We detail the coding frequencies for each of these concepts in each case over different time pe- riods in Table 4.

Since these three stages were common to all five cases, we were able to compare process dynamics over time (using matrix coding queries in the NVivo software). Figure 1 represents the data structure that emerged from our analysis of how the case study corporations responded to climate change, illustrat- ing the first-order categories, the second-order themes, and the aggregate dimensions that served as the foundation of corporate responses to climate change (Gioia, Corley, & Hamilton, 2013). Matching

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

Finally, using the aggregate dimensions of the three stages as a foundation, we returned to the case histories to identify when and why firms moved be- tween the different stages and altered their activities and practices. This enabled us to map key events in the case histories to how organizations responded to the critiques and pressures originating from socio- political and intraorganizational contexts. While the grounded coding provided the aggregate di- mensions, the longitudinal aspect enabled us to identify and compare how the cases moved from one stage to another. In Table 5, we list definitions of the key concepts identified in our data analysis, and, in Figure 2, we provide a simplified illustration of how the grounded analysis maps onto the case histories in explaining how the grand challenge of climate change was translated into “business as usual.”

As we describe in detail in the following sections, the key driver of change among the three stages was critiques from different stakeholders (such as share- holders and financial analysts, the media, cus- tomers, employees, NGOs, and the public) who drew upon 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 that business was a key contributor to the climate crisis. These firms sought to overcome the “tension” be- tween the conflicting objectives of business as usual and the grand challenge of climate change by “framing” the issue as business friendly, thereby making competing interests appear compatible. However, this led to further criticism and new ten- sions in the form of “dissonance” between corporate framings and their local activities and practices. This led to our second stage of translation, “localizing,” in which managers created local conventions that sought to satisfy the opposing goals of business growth and environmental well-being. Creating roles, 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 which prior initiatives were purified or diluted within other activities to provide clearer commercial returns. In each case, we found that the meaning and practice of corporate engagement with climate change steadily diminished and narrowed.

FINDINGS

In the following sections, we summarize key pat- terns and significant events that unfolded between 2005 and 2015 in each of the five case study

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

Coding references n (%)

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

Framing EnergyCo (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)

Localizing EnergyCo (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)

Normalizing EnergyCo (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)

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organizations. We provide representative support- ing data for the second-order themes of the three stages of framing, localizing, and normalizing, as well as the tension, dissonance, and evaluation that the firms responded to (see Tables 6, 7, and 8, below). The timing and content of the three stages differed for each firm based on specific critiques and pressures from internal and external stakeholders (see Figure 2 and Table 5).

Framing Climate Change as a Business Concern

Each of the five companies engaged with the issue of climate change during the early to mid-2000s as a result of different external and public critiques. For instance, at EnergyCo, a new cadre of senior man- agers was aware of growing public pressure for low- emissions energy production and the likelihood of government regulation of carbon emissions in the near future. Indicative of this change in thinking, in 2005, the company commissioned a joint report with an environmental NGO on low-emissions energy production. This led the company to focus on di- versifying its energy production portfolio toward

renewable energy sources. In its 2006 Sustainability Report,thecompanyemphasizedthat“climatechange is a critical issue facing us today, and [EnergyCo] accepts the scientific consensus that greenhouse gases in our atmosphere need to be stabilised so as to avoid ‘dangerous’ climate change.”

For FinanceCo, engagement with climate change wasaresponsetorecentbankingscandalsandnegative public sentiment toward financial institutions. In 2005, FinanceCo’s then-CEO joined with several other corporate executives to form a Business Roundtable on Climate Change, which commissioned research and advocatedforgovernmentactiontoreducegreenhouse gas emissions. Indicative of its growing focus on this issue, in 2008, FinanceCo released a Climate Change Position Statement that asserted: “There is little doubt that climate change is one of the defining issues of our time . . .We believe that climate change will have sig- nificant economic, social, and environmental impacts in the regions where we operate.”

At GlobalCo, climate change formed a central part of the story through which the new global CEO sought to reinvent the company and respond to the firm’s negative public image as a large, uncaring, and

FIGURE 1 Data 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 and gloom; Not altruism; Not emissions

Eco-efficiency; R&D; new products and markets; 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

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environmentally destructive multinational. He identified various “megatrends” that he believed would be central to the growth of the business into the 21st century and could provide a more positive public image.

We started to look hard at sustainability and climate change in 2004 when we set up an internal debate between 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 and caused by man.

(GC Global Sustainability Manager, speech, May 2011)

From a somewhat different angle, InsureCo’s focus on climate change evolved in reaction to shareholder criticism following a series of storms, bushfires, and a major drought that resulted in significant claim payouts for the company. The chief risk officer explained: “We were slowly getting more weather- related events and bigger claims in weather-related events and it was costing us more money.” A new CEO was hired in 2001, and attention shifted to the risks of climate change in upsetting traditional models of insured weather risk. As one of the com- pany’s former sustainability managers recalled, “[The CEO] used to joke about how lucky he was that

TABLE 5 Key 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 that poses competing goals and interests for an organization

How to make the interests of the business compatible with the implications of climate change?

Framing Interpreting, defining, and communicating an issue in order to gain the support of external and internal stakeholders

How to understand the challenge of climate change as a business issue?

Association Ruling in particular understandings when combining discourses

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

Disassociation Ruling out undesirable features of combined discourses

Rejecting certain themes when engaging with climate change (e.g., sacrifice, the need for regulation, doom and gloom prognoses, or purely environmental concerns)

Dissonance Criticisms of the discrepancy between initial framing and practice

How to respond to social/environmental and market critiques of the organization’s framing of climate change as an important business issue?

Localizing Making new framings locally relevant through conventions that find compromises between competing goals

How to align the challenge of climate change with local practices?

Incorporation Developing new roles, capabilities, products, and services

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

Commensuration Transformingdifferent qualitiesinto a commonmetric Savings from reduced energy consumption, measures of increased employee engagement, sales figures from new green products and services, carbon pricing

Proselytization Promoting and marketing activities for external and internal audiences

Employee communications and culture change programs, marketingof carbon neutralstatus, public advocacy for emissions trading, alliance building with NGOs and government

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

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

Normalizing Realigning practices and activities with dominant organizational discourses

How to adapt earlier climate change initiatives in order to maximize shareholder value?

Purification Reemphasizing the local and singular dominant discourse

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

Dilution Broadening the focus and objectives to include other concerns

Widening of sustainability efforts beyond climate, including environmentally harmful but profitable activities

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

At MediaCo, engagement with climate change re- volved around a public event in the United States in 2007, where, after hearing from other business leaders and prominent climate activists, the global CEO decided “to give the planet the benefit of the doubt” and announced his company’s implementa- tion of a global energy initiative.

Thus, in each company, senior managers embraced the topic of climate change largely in response to growing social and environmental criticism of business activities, as well as perceptions of a changing regula- tory and physical context. However, engaging with the issue of climate change also highlighted the underlying tension between existing business models and the challenge of decoupling economic growth from its material impacts. In responding to this tension, senior managers in each organization engaged in a process of framing to make competing interests appear compati- ble and relevant in their organizational settings.

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

negative or threatening understandings (see Table 6). For example, at GlobalCo, climate change was strongly associated with “innovation,” “customers,” and “opportunity.” As one of the world’s largest manufacturers of industrial products, GlobalCo’s managers emphasized how a focus on new clean technologies offered a way not only to respond to market and regulatory risks, but also to take advan- tage of emerging opportunities. Moreover, this par- ticular framing promoted a vision of returning the company to its roots as a source of industrial in- novation, and responded to social and environmen- tal criticism by highlighting the positive social role of the company in providing a more environmentally sustainable future for all.

By contrast, at EnergyCo, climate change was framed by senior managers around business issues of regulation and risk. The core narrative focused on the changing regulatory context in which a government- introduced emissions trading system was keenly anticipated. Indeed, the company had begun to in- vest in low-emission renewable energy generation in expectation of a shift to carbon trading, and began to emphasize its future role in transitioning the coun- try toward a renewable energy future.

FIGURE 2 Climate Change Translation within Corporations

Acquires wind and hydro assets (Jan. 2005)

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

Creates implementation team for government carbon pricing (Jan. 2009)

Welcomes government emissions trading scheme (July 2011)

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

Founding member of business roundtable on climate change (Feb. 2006)

New CEO; Climate Change Policy Statement (Feb. 2008)

Carbon risk training for investment staff (June 2009)

Carbon trading and pricing of carbon investment risk (July 2012)

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

CEO announces eco initiative (May 2005)

Expands commitment to eco R&D (Nov. 2007)

Forms eco-tech alliances with airline and auto companies (Oct. 2011)

Global head of eco initiative resigns (Dec 2012)

Focus on oil sands and fracking (Dec. 2013)

Public advocacy for climate action (since 2002)

Focus on extreme weather risk; founding member of business roundtable on climate change (Feb. 2006)

CEO resigns; new executive team (May 2008)

Worst year for natural disaster costs (July 2011)

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

CEO announces energy initiative at public event (May 2007)

125 initiatives to reduce emissions by 20% (June 2008)

Criticism for climate denial messaging (April 2011)

CEO questions climate science (Jan. 2013)

Climate initiative relabeled (Dec. 2014)

EnergyCo

FinanceCo

GlobalCo

InsureCo

MediaCo

Framing: Localizing: Normalizing:

2005 2006 2007 2008 2009 2011 2012 2013 2014 20152010

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FinanceCo also associated climate change with risk and opportunity, based on the likely introduc- tion of government-mandated emissions trading and reputational threats in the form of criticism from NGOs and community members about the organi- zation’s financing of fossil-fuel developments such as coal mines and power plants. Rather than shying away 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 increasingly carbon-constrained world.

MediaCo also framed climate change within a risk discourse. As the company’s CEO proclaimed in launching his company’s climate and energy initia- tive in 2007, “Climate change poses clear, cata- strophic threats. We may not agree on the extent, but we certainly can’t afford the risk of inaction” (MC CEO, Energy Initiative Statement). However, the call for action was also associated by managers and in

TABLE 6 Framing 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. What we’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 you need to start preparing for it.” (EC10)

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

Disassociation (reducing emissions) “That kind of response [advocating for renewable energy] is going to have a far greater impact on the country and the world’s ability to respond to the issues of 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 was a realization that we were incredibly out of step with stakeholder expectations.” (FC01)

Association (leadership) “As a financial institution with relationships right across society, we will play a pivotal role helping our customers, employees, and the broader community shift to this low-carbon economy.” (FC Climate Change Position Statement, 2007)

Disassociation (sacrifice) “It is easy to dwell on the challenges, but we do believe that there are exciting opportunities for companies with 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 about accelerating economic growth.” (GC CEO, 2006)

Association (new opportunities) “Why? Because developing a cleaner, more secure, more efficient infrastructure isn’t just a responsibility—it’s an opportunity to solve new requirements for productivity in some of the world’s largest markets; it will deliverbigresults forus andforanyothersmart,forward-lookingcompany.” (GC Global Sustainability Manager speech, May 2011)

Disassociation (green) “[Focusing onclimatechange]wastoopreciousanditlet opponentsthinkthat, if you had a green initiative, you didn’t care about jobs.” (GC CEO, 2011)

InsureCo Tension “What will we do? What will happen? Long term, how are we going to manage the 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 in weather-related events and it was costing us more money.” (IC11)

Disassociation (altruism) “You’re asking him or her to do somethingthat seems to be altruistic, and we’re back in this debate about, ‘Hang on, that’s not our responsibility.’” (IC10)

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

Association (win–win) “Of course it saves money. So it has some very positive business side effects as well 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 business has done something.” (MC15)

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TABLE 7 Localizing Stage of Climate Change Translation

Organization Enactment Indicative Examples

EnergyCo Dissonance “How do we best maximize for our customers and for [EnergyCo] the value of the carbon price?” (EC05)

Incorporation (new products and markets)

“We’ve been out there building wind farms, getting a lot of development sites, and working 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 massive carbon team that does modeling on the impacts of Carbon Pollution Reduction Scheme.” (EC04)

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

FinanceCo Dissonance “You don’t want to carve yourselves out of something that actually makes sense . . . That is at odds with the economic outcomes of some of my clients in the mining sector for example.” (FC09)

Incorporation (new products and markets)

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

Commensuration (business metrics)

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

Proselytization (green branding)

“One of the single biggest things you can do to—from a reputation point of view—is position 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 little bit of a soft initiative.” (GC CEO, 2008)

Incorporation (eco-efficiency)

“While we’ve made terrific progress reducingour own environmental impact, we’re now committing to make our company twice as energy efficient by 2015.” (GC Sustainability Report, 2009)

Commensuration (business metrics)

“As with all initiatives at GlobalCo, we placed bold business metrics around it. We executed 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 employee buy-in and it’s great from an HR perspective of the employee value position . . . You can get the best people without paying best dollars.” (GC02)

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

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

Commensuration (business metrics)

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

Proselytization (advocacy) “The stuffwe weredoing on climatewas gettinghuge traction.Wherever [the CEO]spoke and I spoke, we were being pulled into all sorts of new environments and communities . . . We were talking to the planning industry, we were talking to the building industry, and governments of all kinds were pulling us in.” (IC10)

MediaCo Dissonance “We realized that we couldn’t just go out and say, ‘This is what you should be doing,’ and preaching. 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, built around our Carbon Councils, which have been established at each business unit.” (MC Environment Newsletter, 2010)

Commensuration (carbon off-sets)

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

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

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strategy documents with the social role the company would play in promoting improved energy efficiency and the business advantages of reduced energy consumption.

Finally, at InsureCo, climate change was linked to thespecific language of “extreme weather.” As one of

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

TABLE 8 Normalizing Stage of Climate Change Translation

Organization Enactment Indicative Examples

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

Purification (back to basics) “I’m not even worried about climate change and how people perceive us on that. I’m going into this with a mindset of customers need to know exactly how much money they’re going to save.” (EC17)

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

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

Purification (back to basics) “I don’t think we necessarily downsized the team, but we put them onto other commodities of trading. So, some of the lay knowledge is still there, but they’re certainly not actively doing what they were years ago because there’s no market.” (FC04)

Dilution (sustainability) “We supportthe shift to a moresustainableeconomic model that is less dependent on fossil fuels while recognizing the importance of responsibly managing the transition to support sustainable economic development.” (FC Climate Policy, 2014)

GlobalCo Evaluation “But, when the numbers started not being so good . . . Suddenly, they needed to reduce 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 press release, Sept. 2015)

InsureCo Evaluation “When you were sitting in strategy, you thought that’s a bit of a stretch of the business to say its sustainability is good business because it’s all about sustaining 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 to get growth out of the business. They associated him too strongly with being an environmental climate change leader, and shouldn’t he just be focusing on getting growth and returns?” (IC01)

Dilution (sustainability) “It was not just around climate change, but it sort of morphed into a sustainability message and then that morphed into a waste reduction message. There were all sorts of initiatives that people then started to take that basically resulted in the company saving money.” (IC11)

MediaCo Evaluation “There are other things now that are far more pressing to people than the environment. People are more concerned about the cost of living and how they’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 was a lot of push, people were talking about it. But now it’s fizzled pretty well right off.” (MC02)

Dilution (expanded focus) “What we’ve talked about for the last six months is how we broaden [the initiative] to engage broader sustainability issues aside from just climate change, and that fits with the goals that the [global company] have set us.” (MC13)

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

However, framing also disassociated climate change from “doom and gloom” interpretations that challenged business growth and corporate expan- sion. In a classic enunciation of the win–win ethos, GlobalCo’s global sustainability manager said, “I can’t stress this enough. We’re eliminating the false choice between great economics and the environ- ment. We’re looking for products that will have a positive and powerful impact on the environment and on the economy” (GC Global Sustainability Manager, speech, May 2011). Yet, for particular industry sectors, some framings were seen as more applicable than others. At EnergyCo (unlike MediaCo), for example, the link between climate change and emissions reductions was explicitly rejected, given the company’s reliance on increasing electricity usage. As the sustainability manager explained, “Our goal is to get more customers, which means we’re selling more energy. So that kind of emission reduction target isn’t actually the most ef- fective way that we can contribute to dealing with climate 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 risks and win–win opportunities, and companies have a responsibility as social leaders to respond to envi- ronmental challenges. The framing was produced through association and disassociation, by which actors ruled in particular concerns that were orga- nizationally salient and ruled out alternative in- terpretations that challenged existing business models. As shown in Table 6, these variations were shaped by each organization’s business and industry context.

Localizing the Framing in Practice

While framing was the first stage in the translation of climate change within corporations, new critiques from 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 some cases, critiques evolved among employees who felt their organizations’ environmental efforts lacked sincerity. For example, FinanceCo’s sustainability

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

The dissonance between the framing of climate change and corporate practices was also critiqued in market discourses. For instance, at GlobalCo, the decision to address climate change through “green” innovation led to significant criticism from the company’s board of directors and major industrial customers. As the local sustainability manager re- flected, “[The CEO] certainly got resistance from customers and others around the place, because it seemed very green . . . there were some that weren’t pleased about it” (GC02). FinanceCo faced similar criticism from corporate clients in the fossil fuel sector, who objected to the company’s advocacy for carbon pricing. The head of energy project finance explained: “So, the coal mining sector’s been really hard on the banks in terms of positions we make on coal. So, there are industry groups with vested in- terests that are clients of ours, and we have to manage that conflict.” (FC09) Broadly speaking, managers from more operational parts of these businesses objected 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 change and seeking to make initial framings locally relevant. They highlighted practices that provided a tempo- rary compromise between the competing market and social/environmental discourses. As outlined in Table 7, in this localizing stage of the corporate translation of climate change, the purpose of in- corporation, commensuration, and proselytization was to make climate change real and tangible for operational managers through everyday business activities.

Incorporation. A first step in the localization of climate changeinthe five caseorganizations involved translating the corporate acknowledgment of climate change into more tangible practices and activities, including, for instance, focusing on the development of new products and services. For example, at Glob- alCo, helping “our customers to tackle their most pressing 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- corporationalsoinvolvednewactivitiesthatimproved

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

A further theme in incorporating climate change into practice was the emphasis companies placed on issues of innovation and research and development. Viewing climate change as both a risk and an op- portunity drove companies to invest in developing new capabilities that would enable them to better prepare for future possibilities. For instance, Insur- eCo employed climate scientists and technical ex- perts to model future weather patterns and research the resilience of building construction to threats such as hailstorms and bushfires.

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

Commensuration. Having made the link between climate change and established business activities, a second element of localizing stressed how these practices could be assessed as meaningful mea- sures of corporate value. As noted above, a com- mon practice focused on eco-efficiency and reducing energy usage, which could be readily translated into cost savings. However, commen- suration also involved new measures of corporate value. For instance, at FinanceCo, an internal price on carbon was developed by a project team to factor in the likely future regulatory charge of a certain number of dollars per ton of carbon emissions. This metric was then used in investment decisions and global markets where carbon trading was already established.

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

pricing), managers were careful to emphasize spe- cific metrics that could justify the investment of time and money in climate change-related activities, specifically in response to market critiques. As GlobalCo’s local CEO confided, “I’m going to be real frank 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 corporate engagement with climate change, a third element of localizing involved communicating these practices and justifying them to a diverse range of stake- holders. Such proselytization took various forms. For instance, at MediaCo, the focus on eco-efficiency resulted in a branded company-wide communica- tion strategy and culture change program that pro- claimed that “everybody can make one degree of difference.” This was combined with the creation of “carbon councils” among the company’s different business units, and staff competitions for improving energy efficiency. As the company’s environment manager explained, “That inspires others and it gets things done. It’s a fantastic tool. It’s how behavioral change happens on sites” (MC15).

Proselytization also involved engagement with external stakeholders, such as customers, clients, NGOs, and political parties. This was particularly the case at EnergyCo and FinanceCo, where the issue of regulatory change had major business implica- tions. Both of these firms became strong advocates for the government introduction of an ETS, which they viewed as critical to providing business cer- tainty for future investment. They communicated this policy stance through workshops, conferences, and external publications. A sustainability manager at EnergyCo explained, “We’ve been advocating re- ally strongly for things like the Renewable Energy Target, really, really strongly for the CPRS [Carbon Pollution Reduction Scheme] where a lot of our counterparts are silent” (EC04).

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

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Normalizing Corporate Practices

Localizing the framing of climate change enabled corporations to respond to both market and envi- ronmental critiques. However, shifting business fortunes, internal corporate politics, and changes in external political discourses resulted in further crit- icism. Unlike in earlier stages, market discourses became more dominant, leading to focused evalua- tions and tests of earlier corporate climate commit- ments. In particular, shareholders, managers, and financial analysts increasingly questioned the ability of localized activities and practices to satisfy market interests (e.g., reduced costs, increased revenue and profitability). These evaluations led to a new stage of translation that we have termed “normalizing.” In this stage, the temporary compromise between mar- ket and social/environmental discourses was broken and corporate executives sought to realign climate initiatives with the dominant market discourse of maximizing shareholder value. Within this stage, we identified two principal activities: purification and dilution (see Table 8).

Purification. One response to the market critique of corporate climate initiatives involved stripping back earlier climate change commitments and reemphasizing the need to respond to traditional drivers such as profit growth, cost reduction, and maximizing returns to shareholders. For example, in 2008, as a result of a failed overseas expansion, stagnant growth, and a falling share price, share- holder criticism led to the resignation of InsureCo’s CEO and the installation of a new executive team to turn the company around. The earlier compromise that climate change actions would pay back in terms of market outcomes had been evaluated and found lacking. The new CEO expressed skepticism about the company’s climate change advocacy, and stressed the need to “get back to basics.” As one of the company’s former sustainability managers recalled, “So, yeah, it was a total refocus . . . Linking it more to the financials, and removing ourselves from the industry bodies around climate change” (IC01). Another former executive described the change in the company’s attitude on climate as follows: “Look, that was all a nice thing to have in good times, but now we’re in hard times. We get back to core stuff.” (IC10)

Internal restructuring and purification was also evident at GlobalCo, where reduced growth forecasts and stagnating sales resulted in major cost cuts in 2012 and a reassessment of the focus on renew- able energy and “cleantech” products. Once again,

internal criticism of thecompany’s eco-initiative and turnover of key senior managers who had champ- ioned the climate focus led to a winding back of earlier initiatives. The former sustainability leader explained, “It has always been a ‘sell your product every quarter’ sort of company . . . But we lost the company officer leading it; it lost its profile and now the 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 by broader 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 against carbon pricing and climate change action, many corporations stepped back from the public spotlight on this issue. For many managers, climate change became controversial, with attendant reputational risks. At the height of the political debate, the head of government relations at FinanceCo explained: “How we deal with sensitivities within the organization about taking what can be seen as a partisan position in 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 leaders recanting their earlier advocacy on the issue. At MediaCo, the company’s CEO now publicly ques- tioned climate science and the urgency of climate change, while media observers noted the increasing intensity with which the company promoted climate change skepticism in its publications. Declining public concern over climate change appeared to re- duce the business case for engaging with the issue, and indeed the company’s publications now appealed to growing public skepticism about climate change as a source of sales.

Dilution. Beyond just a narrowing of corporate focus on shareholder value, normalizing also in- volved enmeshing the earlier attention to climate change within a broader range of concerns. We la- beled this process “dilution” and it was evident in all of our case organizations as a response to the changed external and internal discourses on climate change. 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”) and tar sands extraction. Rapid global growth in these industries provided significant markets for GlobalCo products, and the company characterized its in- volvement in these industries as a way of continuing

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to solve “tough environmental challenges” by im- proving efficiency (GC Fact Sheet, 2014). As one senior manager explained, “We are pointing more R&D dollars toward natural gas. Really making sure that we have the social license to operate, that we are working on tough problems around gas” (GC05). Despite criticism from environmental NGOs that these fossil fuel industries contribute to increased greenhouse gas emissions, company executives defended their new positions by argu- ing that their focus was broader than just climate change.

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 its investments in coal seam gas production, and later argued against renewable energy targets. Dilution was also evident at MediaCo, where the focus on “carbon” and “climate” became less apparent within a broader focus on “environment,” “waste re- duction,” and “water use.” The company’s sustain- ability manager explained: “We’ve broadened what we do. It’s no longer confined to just an energy and carbon focus.” (MC14) In widening the scope of corporate initiatives to “sustainability,” the earlier emphasis on climate change dissipated in favor of more immediate and profitable concerns. Indeed, in some cases, the term “climate change” disappeared altogether from corporate reporting. The sustain- ability manager at InsureCo commented: “In fact, if you look at our sustainability report, I challenge you to find the words ‘climate change’ . . . You know, a bit of a cop-out.” (IC07)

Dilution thus served to defuse politically conten- tious issues by submerging them within a range of related concerns that could be more easily accom- modated within prevailing corporate discourses. In particular, the idea of advocating for carbon regula- tion and emissions mitigation was increasingly replaced by a view that climate change was now in- evitable and businesses should focus on adapting to the new physical environment that climate change would bring. At FinanceCo, this involved linking climate change to what was now termed the “2 de- gree economy,” while, at InsureCo, the focus was on mapping vulnerable communities, identifying “un- insurable” areas, and pushing for local adaptation to increasing floods, droughts, and fires.

Normalization thus enabled senior managers to respond to the market critique and evaluation that engaging with climate change distracted from the core purpose of maximizing shareholder value,

particularly in circumstances of financial stress, new investment opportunities, and a changed po- litical context. Of course, this move also opened these organizations to further criticism from the media, NGOs, and employees that they had failed to honor earlier commitments to climate action, or that their current focus on environmental sustainability amounted to nothing more than greenwashing. However, while offering the potential for a fresh round of corporate climate change engagement, this final stage of normalizing highlighted how the evaluation of market worth appears to be a more fundamental concern within corporations than en- vironmental well-being.

A GROUNDED MODEL OF BUSINESS RESPONSES TO GRAND CHALLENGES

In the previous sections, we described how the five case organizations responded to climate change over 10 years (see Figure 2 for key events). In this section, we present a grounded model of the processes in- formed by this analysis, in order to theorize how corporations respond to grand challenges. The model builds on the conceptualization in the B&NE literature of how corporations respond to environ- mental problems by strategically framing competing demands in ways that uphold the tension between the market and the environment (Hahn et al., 2014; Van der Byl & Slawinski, 2015), and enact this framing through activities and practices (Bansal, 2003; Crane, 2000; Delmas & Toffel, 2008; Hoffman, 2001; Howard-Grenville, 2006; Sharma, 2000). These studies draw attention to the importance of local actors in making sense of the problem and the role of current functions and structures in imple- menting practices. Our model builds on these in- sights by demonstrating how competing demands are subject to continuous critique over time, re- vealing tensions, dissonance, and evaluations that trigger firm activities to resolve them. The findings of our five cases suggest that initial corporate commit- ments to grand social and environmental challenges inevitably conform to short-term market assump- tions (see Figure 3). The model also highlights po- tential alternative responses (indicated by dotted arrows). Although the concept under scrutiny (cli- mate change) and the revelatory five case studies have unique features, we argue that the patterns in the model also characterize the underlying limita- tions of corporate engagement with other grand challenges that are converted into business-as-usual formulations.

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From Grand Challenge to Business as Usual

As illustrated in Figure 3, the first stage in the translation of grand challenges within the corporate arena is triggered by highly publicized events largely based on social or environmental concerns (Hoffman & Ocasio, 2001) (bold arrow in model). As outlined in our findings, senior managers in all five case studies sought to respond to external critiques from the gov- ernment, NGOs, the media, and consumers in regard to their contributions to the climate crisis. In this initial framing stage, executives explicitly associated the grand challenge of climate change with conven- tional market discourses (e.g., climate change as a business opportunity for innovation and leadership, an impetus for managing risk, a way to better respond to customers). At the same time, these strategic fram- ings were used to disassociate their organizations from aspects of social/environmental discourses that threatened existing business models, by, for instance, rejecting the need for government regulation, playing down perceptions of being “green” or altruistic, and even (in the case of EnergyCo) rejecting the need to reduce energy production.

Thus, our model provides support for the role of framing and “win–win” rhetoric as a key part of the

initial corporate response to social and environ- mental challenges. Indeed, while not evident in our case study data, it seems entirely possible that many firms might well reject this initial framing attempt (what we have termed “dismissing” in Figure 3). While our case companies were among the most proactive organizations in Australia in responding to the issue of climate change during this period, the vast majority of companies were far less engaged, with many either ignoring or rejecting climate change as an issue of concern for their organizations (Nyberg et al., 2013). However, dismissing a grand challenge does not resolve the initial tension, and businesses that do so are likely to continue to face criticism.

Framing is only the first step in the organizational translation of grand challenges. These initial posi- tions are not fixed, and indeed produce further ten- sions and dissonance as they are subjected to new criticism based on market or environmental dis- courses. For instance, the claim that a social or en- vironmental problem is a strategic business concern can be readily challenged in terms of its relevance for a specific business and contribution to bottom-line results. Engaging in corporate environmentalism can

FIGURE 3 Grand Challenge Translation within Corporations

Grand Challenge

Tension

Framing

Association

Disassociation

Business as usual

Dismissing

Dissonance

Splitting

Localizing

Incorporation

Commensuration

Proselytization

Market discourses

Embedding

Normalizing

Purification

Dilution

Grand Challenge

Business as usual

Evaluation

Social and environmental discourses

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thus be critiqued as a distraction from core business or harming shareholder returns (Devinney, 2009). As outlined in our findings, this led to a second stage of translation, which we termed “localizing.” Senior and operationalmanagerswhoengagedinlocalizingsought to satisfy the opposing goals of business growth and environmental well-being by creating local conven- tions and practices. This process includes the activities of incorporation, commensuration, and proselytiza- tion, aimed at responding to critique by demonstrating how the initial framings of climate change could be operationalized in practices that respond to both mar- ket and social/environmental concerns.

Of course, there is also potential here for an alter- native process, which, while not dominant in our data, appears in other critical accounts of corporate “greening” (Crane, 2000; Fineman, 1997). What is termed “splitting” (Lewis, 2000; Smith & Lewis, 2011) in Figure 3 refers to the possibility that organizations may fail to localize their earlier framings of social/ environmental issues in practice and rely on a purely rhetorical response. This aligns with the radical crit- icism of corporate environmentalism as “green- washing,” a mostly symbolic activity lacking tangible practice (Bowen, 2014). Claims by car companies and airlines that they “offset” the carbon emissions of the products their customerspurchaseare good examples of splitting practices, and the disconnect between the rhetoric and substance of corporate environmental- ism (Lyon & Montgomery, 2015).

While the normative and critical NCE literatures acknowledge the framing and localizing elements of our proposed model, often omitted from existing analyses is the potential for the deterioration of such initiatives. While localizing provides a temporary compromise in seeking to balance competing de- mands, over time, these tensions often return, par- ticularly in circumstances characterized by financial contraction, threats to corporate profitability, and changing political contexts. Newly localized prac- tices are subjected to renewed market critique through the process of evaluation. Practices must contribute to corporate profitability and shareholder value as “obligatory passage points” for continuation and maintain their fit with prevailing market dis- courses (Callon, 1986; Denis, Langley, & Rouleau, 2007). If they do not satisfy these market tests (bold arrow in model), then, in the third stage of normal- izing, they are subject to purification and/or dilution. As we have seen, this often involves the turnover of senior managers who have championed climate change action, as well as the unwinding of localized practices in a return to “core business.” The

translation of the grand challenge into business as usual thus concludes; in several of the corporations we studied, even the term “climate change” was expunged from the corporate lexicon. The proces- sual cycle accordingly opens up new potential ten- sion between the grand challenge and business as usual.

Importantly, this shift may not be direct or straightforward. For instance, companies that are promoted as best practice examples of corporate environmentalism with a longer history of activity may in fact undergo multiple stages of evaluation, creating temporary compromises in order to satisfy market tests in the short term and delay normalizing. In Figure 3, we label this possibility “embedding” (see also Smith & Lewis, 2011), foreseeing the po- tential for multiple circuits of evaluation in which corporate environmental initiatives are integrated into business processes to generate competitiveness (Vilanova, Lozano, & Arenas, 2009). However, the tensions are not resolved, only deferred (Putnam, Fairhurst, & Banghart, 2016), and eventually provide the seeds for later forms of change toward normali- zation (Seo & Creed, 2002). While alternative busi- ness structures such as benefit corporations offer potential in managing these conflicting tensions (Hiller, 2013), the fiduciary duty of corporate man- agers to stockholders over and above other stake- holders places real constraints on the ability of organizations to meaningfully satisfy theneeds of the market and the environment over time.

DISCUSSION

By providing a longitudinal and comparative ex- amination of how five Australian firms responded to climate change, we have elaborated a theoretical model of how grand challenges are translated into corporate practice. The model clarifies the compet- ing perspectives on how corporations respond to environmental challenges in the B&NE literature by elucidating three stages corporations go through in responding to different pressures continuously revealed through critique. In this final section, we discuss the implications of our findings for the B&NE literature and for debates on climate change. We then outline limitations of the study.

Contributions to Theory

Previous research suggests that companies’ envi- ronmental practices are shaped by different external and internal pressures or critiques (Delmas & Toffel,

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2008; Howard-Grenville, 2006). This creates tensions that trigger organizational transformation (Hart, 1995; Hoffman, 1999), with managers framing environ- mental challenges within the business paradigm in order to address these tensions (Bansal & Roth, 2000; Sharma, 2000). While current B&NE literature sup- ports combining competing demands in organiza- tional practices (Gao & Bansal, 2013), our model suggests a regressive pattern toward traditional busi- ness concerns over time. Our translation model offers several theoretical contributions in this regard.

First, we show how continuous critique of corpo- rate practices drives the translation of social and environmental issues toward business as usual. Cri- tique reveals and makes salient the tensions between competing demands that are temporarily papered over by managerial framings and localized conven- tions. Even embedding social or environmental concerns within practices does not resolve the ten- sions, but merely represses their opposing dis- courses. Moreover, when firms are evaluated, they tend to move toward more secure options. While corporate engagement with specific environmental issues ebbs and flows in response to varying social and political discourses, market discourses are an enduring feature of business. If short-term profit- ability cannot be guaranteed by social and environ- mental initiatives, firm practices will regress toward market imperatives over time through the normal- izing process. Certainly, businesses can successfully engage with relatively tame environmental problems that are resolvable through technical activities that also support profitability (Rittell & Webber, 1973). However, engaging with grand challenges such as climate change is particularly problematic for busi- nesses, given the long-term, complex nature of these problems and the underlying tension between eco- nomic growth and its material consequences.

Second, our study highlights the urgent need to explore corporate environmentalism over longer time horizons. While a few existing longitudinal studies on corporate environmentalism highlight forms of framing and localizing (see, e.g., Bansal, 2003; Howard-Grenville, 2007), they do not account for how these practices are continuously evaluated to satisfy both environmental/social and market de- mands. As such, the normative B&NE literature is conceptually built on early synergies and “low- hanging fruit,” such as energy savings and eco- efficiencies, which do not challenge market discourses of growth and profit maximization. These often-creative solutions engage competing demands simultaneously (Smith, 2014). However, they do not

resolve competing demands, because they cannot integrate costly social and environmental challenges within the organizational goal of short-term profit maximization. Rather, these entrepreneurial com- promises support and reproduce the power of busi- ness firms and dominant market discourses in addressing grand challenges (York, Hargrave, & Pacheco, 2016). Our model thus challenges B&NE scholars to more fully explore the degree to which social/environmental and market objectives can be balanced beyond short-term corporate outcomes, and how such a process can be maintained over time.

Third, our research supports previous conclusions that organizational framing of social and environ- mental issues seldom radically transforms business practice (Crane, 2000; Jermier et al., 2006; Starkey & Crane, 2003). However, our study also contests the assumptions in the critical literature that environ- mental activities are simply ceremonial green fa- çades (Forbes & Jermier, 2002) within which cynical organizational actors placate environmental critique to legitimate business interests (Crane, 2000; Fineman, 1997). The managers we interviewed were, for the most part, emotionally invested and morally concerned about the social and environmental con- sequences of climate change. However, they were also well aware of their limited room to maneuver, and that, if they did not fulfill market demands, they would be replaced. These managers were pragmatic, rather than cynical or naı̈ve. They recognized the tension between meaningful engagement with the grand challenge of climate change and an organiza- tional focus on short-term profitability. Thus, while the outcome of our model converges with the more critical tradition of B&NE, it is important to note the additionally complex motivations underpinning corporate engagement with environmental issues and the role of competing discourses on the actions of corporate managers.

This also contravenes recent thinking on social and environmental challenges that suggests that managers may be simply unaware of how to achieve their commitments (Bromley & Powell, 2012; Crilly, Hansen, & Zollo, 2016). To the contrary, managers accept, albeit sometimes reluctantly, that their role involves the politics of “dirty hands” and the im- possibility of governing innocently (Nyberg & Wright, 2013). They recognize that their in- terventions can be readily dismantled in the event of a dip in profits or market share, opposing investment opportunities, or changes in the political and legis- lative context. Thus, the individual commitment of managers to grand challenges is in many cases

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authentic, and it is at this level that we perhaps see the greatest benefit of their work. By spanning or- ganizational boundaries and collaborating with peers from other organizations, NGOs, and social movements, environmentally concerned managers provide support for more far-reaching political re- sponses. In these arenas, environmental and social challenges are not so readily opposed by the daily organizational evaluations of cost effectiveness and profit maximization.

Contributions to Policy and Practice

Our paper also provides a number of contributions to policy debates. In particular, our analysis illus- trates why the wickedness of grand challenges like climate change is particularly unsuited to resolution solely through corporate responses. We highlight three specific factors that underpin the limits of meaningful corporate action in response to many of the grand challenges facing the world, such as pov- erty and social inequality, environmental degrada- tion, and geopolitical instability.

First, corporations are inherently unsuited to deal with issues that play out over the medium to long term. Despite the discourse of business strategy, technological and financial developments have resulted in the global corporation becoming in- creasingly focused on short-term objectives and outcomes (most evident in the focus on quarterly and semi-annual reporting and the shrinking tenure of executive managers) (Bansal & DesJardine, 2014). This temporal disconnect is particularly evident in the case of climate change, in which the impacts will play out over coming decades with increasing in- tensity. Thisisa timescale of changethatcorporations are unable to internalize within increasingly short- term business models. As we saw in our cases, all firms had problems maintaining a coherent approach to climate change in the decade of our inquiry, given both internal organizational changes (e.g., declining financial performance, leadership changes) and a fluctuating external context (e.g., political, regula- tory, and technological changes). Thus, due to their long-term nature, grand challenges are readily dis- counted by businesses in favor of more immediate problems and opportunities.

Second, while corporate capacity for technologi- cal and market innovation is often invoked as a so- lution to a range of global challenges, businesses are also often complicit in causing the very problems they are asked to solve. Again, this conflict is par- ticularly evident in the case of climate change, in that

corporate reliance on economic growth and fossil fuel-based energy is the central contributor to esca- lating carbon emissions. Avoiding dangerous cli- mate change requires the radical decarbonization of energy, transportation, and manufacturing on a scale that is historically unprecedented and incompatible with economic growth (Anderson & Bows, 2011). Among the corporations we studied, even firms that were relatively progressive on this issue explicitly discountedtheideathatrespondingtoclimatechange should involve activities that threaten growth and existing business activities. Businesses thus have a strong interest in translating grand challenges away from outcomes that challenge their profit-making abilities, while emphasizing responses that can be aligned with value creation.

Third, meaningfully responding to many of the grand challenges facing the world requires systemic intervention based around central authority. Nation states have traditionally confronted major crises such as wars and economic depressions through active government intervention and the regulation of economic and social activity. However, in the cur- rent age of neoliberalism, the role of government is explicitly rejected in favor of market solutions and corporate innovation (Crouch, 2011). Indeed, the political strata have become increasingly sub- servient to corporate interests (Barley, 2007). Gov- ernments increasingly favor economic interventions that ensure profit maximization, irrespective of the social and environmental costs. Rather than govern- ment intervention and regulation of social and economic activities, grand challenges (and their “so- lutions”) are inevitably couched in the language of markets and free enterprise. This broader political context further supports the corporate translation of grand challenges into business as usual. If corpora- tionsarethekeyagentsinrespondingtovariousgrand challenges, then perhaps unsurprisingly they cast the problem in their own image and enact it within existing understandings and activities. This high- lights the importance of diminishing the influence of short-term interests in both political (Lazarus, 2009) and organizational contexts by, for example, limiting corporate political influence and encouraging long- term corporate planning and incentives (Slawinski, Pinkse, Busch, & Banerjee, 2015).

Limitations

Our study also has a number of limitations. First, we have used five organizational case studies to theorize business responses to climate change. All of

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the organizations we studied were actively respond- ing to climate change, which suggests that we need to be careful in generalizing our findings. While fo- cusing on more proactive firms provided an oppor- tunity to understand the processes through which this grand challenge was translated, future research is needed to investigate organizational dynamics in businesses that reject or dismiss this issue, particu- larly as the physical and political ramifications of the climate crisis worsen. Similarly, the political nature of the concept of climate change also suggests the need for care in translating the model to other areas. Less contentious issues can arguably be addressed without continuous criticism purifying or diluting a challenging concept (Hahn et al., 2014). These tensions may even be upheld and addressed through entrepreneurial activities that can benefit a firm (Marcus, 2015).

Second, focusing on the internal processes of translation, our explanation is limited to organiza- tional activities and practices. For-profit corpora- tions operate within a market, where profit motives and growth are rarely questioned. There are thus globally dominant discourses at work, making any challenges to growth and profit seem naı̈ve. While these discourses are accounted for in the model within critique, further analysis of the explanatory power of these discourses would augment our un- derstanding of corporations’ failure to act on climate change.

Finally, focusing on the translation process within corporations makes us partially blind to the societal and global process of climate change translation. As mentioned previously, climate change is a polarizing concept that is hotly debated in countries such as Australia and the United States. This is largely due to the corporate political activities of fossil fuel corpo- rations, conservative media, and sponsored think tanks (McCright & Dunlap, 2011). The process of organizational translation may therefore appear dif- ferently in a society with less polarized debate or within different political regimes.

CONCLUSION

Human-induced climate disruption has rapidly emerged as an existential crisis for humanity. Fol- lowing two centuries of industrialization, humans have become a force of nature, changing the very chemistry of our atmosphere and oceans. The con- sequences of our escalating exploitation of fossil fuels and the destruction of forests and oceans could not be starker. As Elizabeth Kolbert (2006: 189)

remarked, “It may seem impossible to imagine that a technologically advanced society could choose, in essence, to destroy itself, but that is what we are now in the process of doing.”

Facing such a crisis requires radical changes in how our society and economy function. However, while business innovation and market-based solu- tions are promoted as central to the climate response, change, to date, has been limited, and corporate ac- tions often regress to a business-as-usual approach. In this paper, we have argued that a major reason for this lack of progress is the way in which climate change is translated within major corporations. Even among strong proponents of the need to respond to the climate crisis, our research reveals an almost inevitable process of converting such concerns into the more familiar and less threatening discourses of profit maximization and shareholder value. This suggests that business leadership on climate change alone is insufficient to provide the dramatic decar- bonization needed to avoid dangerous climate change. Business and technological innovation is an essential part of the climate response. However, as a systemic issue, climate change also needs regula- tory guidance to ensure significant and permanent reductions in greenhouse gas emissions. Organiza- tions and economies must be managed within the limits of planetary boundaries requiring societal governance for the collective good. While climate change is an unparalleled threat to the future of our society, we need to imagine a future that goes beyond the comfortable assumptions of business as usual. It is this much-needed societal response that repre- sents perhaps our greatest challenge.

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Christopher Wright ([email protected]) is a professor of organisational studies at the University of Sydney Business School. His research focuses on the dif- fusion of management knowledge, organizational change, and political economy. His current research explores cor- porate, political, and societal responses to climate change, with a particular focus on how managers and business or- ganizations interpret and respond to the climate crisis.

Daniel Nyberg ([email protected]) is a pro- fessor of management at the University of Newcastle Business School and an honorary professor at the Univer- sity of Sydney Business School. His research explores how global or societal phenomena are translated into local or- ganizational situations. He has pursued this interest in projects on how organizations respond to climate change, corporate political activities influencing public policy, and adaptations of sickness absence policies.

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