Intra-Sectoral Differences in Climate Change Strategies: Evidence from the Global Automotive Industry

Companies are increasingly challenged for action on climate change. Most studies on business responses to climate change focus on cross-sector comparisons and neglect intra-sectoral dynamics. This paper investigates the influence of supply chain position and regional affiliation on climate change strategies within a particular industry. We present a generic framework integrating both market and non-market responses to climate change. We argue that climate change strategies comprise several corporate activities that have different foci of interaction and four main objectives: governance, innovation, compensation and legitimation. Using a global sample of 116 automotive companies, we conduct a cluster analysis and identify four types of strategy. We find that the sophistication of automobile manufacturers' strategies significantly differs from that of suppliers. Regional affiliation and firm size prove to be determinants of the strategy type pursued. We cannot find evidence for a relationship between financial performance and a company's strategic approach to climate change. © 2017 The Authors. Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd.