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

This article focuses on the Global 500, which are the world's largest companies by revenue, to examine the factors and dynamics internal to companies that motivate some corporations, but not others, to engage in transnational climate governance. Empirical results based on multilevel mixed-effects analyses, which separately identify the relative weight of firm and country-level factors, suggest that the likelihood that a firm participates in transnational climate governance (TCG) is higher when there exists a policy supporter who champions sustainability policies and when a company adopts explicit sustainability practices, such as the incorporation of ESG (Environmental, Social and Governance) principles. Voluntary climate action and carbon disclosure are more likely to take place when a company has a large asset base and certifies with the ISO 14001 environmental management standard. Moreover, the level of civil liberties that corporations enjoy in their respective country of origin is associated with participation in TCG. A decomposition of the variance indicates that firm-level factors account for a majority of the variance in TCG participation. This study has implications for climate change governance and policies, which have increasingly focused on concrete climate solutions and innovations by nonstate and substate actors.