Multinational and large national corporations and climate adaptation: are we asking the right questions? A review of current knowledge and a new research perspective

Abstract

Adapting to climate change requires the engagement of all actors in society. Until recently, the predominant research focus has been on governments, communities, and the third sector as key actors in the adaptation process. Yet, there is a growing emphasis internationally on understanding the role of and the need to engage businesses in adaptation given their potential to finance projects, develop technologies and innovative solutions, and enhance the scale and cost-effectiveness of certain adaptation measures. Large national and multinational corporations are among the key actors in this respect. Already, many of these corporations are purportedly taking steps to adapt their operations to climate change. Some stated reasons for their engagement include minimizing potential impacts on value chains, improving resource efficiency, enhancing production of sustainable raw materials, and supporting customers', suppliers', and communities' climate change adaptation efforts. However, there is a paucity of work analysing adaptation actions by these corporations, their motivations and contribution to broader adaptation and climate-resilient development efforts, as well as possible instances of maladaptation. We apply a three-tier framework on drivers, responses, and outcomes to examine the state of knowledge according to recent literature on private sector and corporate adaptation to climate change. Our review highlights that the literature on the impact and outcomes of corporate adaptation actions is sparse and we consider the implications for future research. Our analysis concludes with a reflection on the relevance of corporate-led adaptation-for the companies themselves, policymakers at all scales, as well as society at large.

How do African SMEs respond to climate risks? Evidence from Kenya and Senegal

“…The literature increasingly seeks to unpack the detailed drivers that motivate economic agents to adapt or prevent them from doing so (Averchenkova et al, 2016;Hertin, Berkhout, Gann, & Barlow, 2003;Agrawala et al, 2011;Galbreath, 2011;Berkhout, 2012;Linnenluecke et al, 2013;Pauw & Pegels, 2013;Pauw, 2015). While the primary motive of firms may be to keep down costs, minimize disruptions or increase sales, the way the relevant decisions are taken is influenced by a range of additional factors.…”

“…Much of the relevant literature has focused on the private sector in developed countries (e.g., Linnenluecke, Griffiths, & Winn, 2013;Agrawala et al, 2011) and on larger firms (e.g., Averchenkova, Crick, Kocornik-Mina, Leck, & Surminski, 2016). Yet micro, small and medium enterprises (SMEs) 1 are highly vulnerable to climate change and they dominate the enterprise landscape in both developed and developing countries.…”

Enabling private sector adaptation to climate change in sub‐Saharan Africa

“…MSPs present their own challenges as a model for structuring action to enable adaptation. Actors from different sectorsand indeed within sectors-have different agendas, priorities, and ways of doing business, which may be difficult to reconcile (Averchenkova et al, 2016). Setting up and maintaining effective partnerships can be very time costly (McAllister & Taylor, 2015).…”

Climate change strategies of multinational enterprises in China

“…These opposing rationales are also evident in the discourse on multinational enterprises' (MNEs) strategic response to climate change. Climate change adaptation by MNEs has been argued to be the result of possessing the adequate capabilities (Berkhout, 2012;Biagini and Miller, 2013;Averchenkova et al, 2015) or of an emergent managerial understanding of how climate change affects the business (Kaplan and Henderson, 2005;Laamanen and Wallin, 2009). An integrative perspective has thus been suggested by Eggers and Kaplan (2013) which considers the two schools of thought jointly and interactively when considering organizational adaptation.…”