The role of geopolitical uncertainty on shaping carbon neutrality policy: Moderating influence of digital...

Climate change compels organisations to pursue carbon neutrality, yet recent global uncertainties-such as the COVID-19 pandemic, geopolitical tensions, and trade tariffs-have prompted many to reassess these strategies. Empirical evidence on how geopolitical uncertainty affects carbon neutrality policies and their financial implications is limited. Simultaneously, digital transformation is increasingly leveraged to support sustainability initiatives. Drawing on contingency theory, this study examines the impact of geopolitical uncertainty on carbon neutrality policies and their capacity to generate competitive advantage, while assessing the moderating role of digital transformation on the link between these policies and organisational performance. The study focuses on French wine producers, who are revisiting carbon neutrality strategies amid geopolitical tensions and U.S. tariffs on European wine imports. Survey data from 225 senior managers were analysed using factor-based partial least squares structural equation modelling. Results indicate that geopolitical uncertainty undermines carbon neutrality policies, whereas these policies enhance both market and financial performance. Moreover, digital transformation strengthens the link between carbon-neutrality initiatives and performance outcomes. Findings underscore the utility of contingency theory for understanding how situational factors influence organisational policy and performance, providing practical guidance for the European wine industry and policymakers in navigating carbon-neutrality objectives under geopolitical uncertainty. The study also offers a foundation for future research on the competitive impact of carbon neutrality across European sectors.