Climate Change Adaptation, MNC Strategy and Environmental Pragmatism: A Cross-country Perspective

Based on a cross-country qualitative study focusing on the agricultural seed business sector, this research explores the nature and scope of strategies adopted by multinational corporations (MNCs) that involve the adaptation to current and future impacts of climate change. It investigates key aspects of MNC climate change adaptation processes by identifying the associated moderating factors.

While physical impacts of climate change have become major concerns for both public and private sectors, academic literature and scientific evidence primarily blame corporations for causing extensive environmental degradation resulting in climate change. However, the academic literature also indicates that the business competitiveness of corporations is likely to increase if they operate in an environmentally sustainable manner. Consequently, an increasing number of corporations are formulating and implementing environmentally
pragmatic strategies. While the literature is primarily focused on corporate environmental strategies aimed at reducing environmental harms and mitigating climate change, it barely
acknowledges strategies that are to address, or adapt to, various impacts of climate change on business operations.

Although MNCs in developed and developing countries are impacted by climate change, the nature of their responses is likely to vary. However, such responses are noteworthy in
countries where physical impacts of climate change are prominent. Bangladesh and Australia are two such developing and developed countries (respectively), according to available scientific research. Consequently, this research explores how MNCs in Bangladesh and Australia formulate and employ their climate change adaptation strategies. The research primarily involves MNCs that deal with agricultural seeds. However, limited data from the pharmaceutical and mining sectors have also been collected to observe any cross-sectoral variations.

Using a qualitative research method involving case study research design, and interviewing and document analysis as data collection techniques, the research reveals that no specific pattern of adaptation strategies exists across MNCs. They either follow a ‘deliberate’ strategy, under a ‘precautionary’ approach, or an ’emergent’ strategy, relying on a ‘wait and see’ approach. However, the interview data has found that most of the companies also follow a ‘subliminal’ strategy which is different from the above two. It somehow contributes to climate change adaptation while using a ‘business-as-usual’ approach. The agricultural seed MNCs primarily follow a mix of ‘deliberate’ and ‘subliminal’ strategies while pharmaceutical and mining MNCs primarily follow ‘subliminal’ strategies. In Bangladesh, MNC strategies are influenced and dictated more by government policy interventions and consumer concerns about relatively more predictable climatic impact. However, in Australia, such strategies are mostly guided by individual corporate policies with little influence of consumer concern about climate change predictability.

Although extant theories and literature have hardly referred to the subliminal strategy, this research has identified and substantiated the importance of this strategy from a climate change adaptation perspective. It is argued that when recognised by MNCs in the context of climate change impacts, ‘subliminal’ strategies become deliberate or emergent climate change adaptation strategies via proactive and reactive actions. The research finding on ‘subliminal’ strategy offers theoretical implications for the theory on business strategy and climate change adaptation. The research also contributes to the literature on corporate environmental management and corporate climate change adaptation. The research has important implications for national policies, corporate strategies and consumer welfare relevant to climate change adaptation.

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oikos International

posted April 26, 2016

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