Environmental sustainability research in international business and strategy: a bibliometric analysis and integrated framework

Climate change consequences, such as environmental degradation, natural disasters, extreme weather, food and water insecurity, economic disruptions and conflicts, present a “defining crisis”: a race we are currently losing despite our potential to win (United Nations, 2020). The reality of sustainable development and climate change is a grand challenge that international business (IB) must address (Ghauri et al., 2021). Although the profit motive drives all businesses to contribute to the environmental crisis, cross-border arbitrage enables multinational enterprises (MNEs) to over-extract natural resources and accumulate waste (Yu et al., 2023). MNEs also engage in environmental misbehaviour “via institutional arbitrage by transferring their irresponsible practices to subsidiaries” (Cuervo-Cazurra et al., 2021, p. 5). It puts MNEs under greater scrutiny for their use of natural resources, the cross-border management of their global value chains and the adoption of environmentally sustainable strategies. On the one hand, MNEs can play a role in mitigating environmental sustainability issues due to their vast resources, technological advancements and global reach (Allen et al., 2025). On the other hand, Zaheer (2025) questioned the sustainability of MNEs’ sustainability initiatives because their actions are contextual to various intrinsic and extrinsic drivers. The actual role played by MNEs is contested (Pinkse et al., 2010) despite their social contract with society to create sustainable wealth while leveraging societal resources (Martinez-Ferrero and Garcia-Sanchez, 2017).

Much research has been conducted in this field, with existing literature reviews on environmental sustainability in IB providing a comprehensive understanding of corporate environmental strategy and its consequences, encompassing a range of firm- and country-specific, as well as contextual, factors. For example, Egri and Ralston (2008) focused on the corporate responsibility literature in the international management context, where corporate responsibility comprises social responsibility, environmental responsibility, ethics and governance dimensions. On the other hand, Holtbrügge and Dögl (2012) focused on international aspects of corporate environmental responsibility in management journals. They noted the skewed geographic focus towards the USA, and polluting and environmentally affecting industries. Cave’s (2014) review of the environmentally responsible management practices of MNEs for their IB activities highlighted the significant lack of research on firm-specific advantages (FSA). Two meta-analytic reviews by Liu et al. (2015) and Hou et al. (2016) examined the antecedents, performance consequences and national contingency of proactive environmental strategy, as well as the impact of corporate environmental and social responsibility on business performance, respectively. A review by Kolk (2016) highlighted (green) environment, ethics, rights and responsibilities and poverty and sustainable development as the key sub-themes within corporate social responsibility (CSR) research over the past 50 years. Finally, Golgeci et al. (2021) reviewed how global value chains and emerging market firms influence each other’s environmental sustainability practices.

The key research gap in the existing reviews is the lack of a review and synthesis of environmental sustainability research in IB and strategy journals. The existing reviews have different focus areas, such as emerging market firms (Golgeci et al., 2021), corporate responsibility (Egri and Ralston, 2008; Holtbrügge and Dögl, 2012), CSR (Hou et al., 2016; Kolk, 2016) and meta-analysis (Hou et al., 2016; Liu et al., 2015). The last review on corporate environmental sustainability was published in 2012 (Holtbrügge and Dögl, 2012). This review, however, focused on management journals. This gap needs to be filled because, although the proportion of sustainability articles in IB journals is small and their distribution is unbalanced, they have shown an increasing trajectory since 2001 (Kolk, 2016; Kolk and van Tulder, 2010). Moreover, given the contested role of MNEs in advancing environmental sustainability (Yu et al., 2023; Zaheer, 2025), this review will enhance understanding of MNEs’ adoption of environmental strategies and how this involvement can be improved. The actual environmental sustainability outcomes raise eyebrows and need pondering by research scholars and managers on “why are we facing such problems if we are doing everything “right” in environmental management?” (Aragon-Correa and Rubio-Lopez, 2007, p. 357). Our review also aligns with the United Nations Secretary-General’s (opening) comment on the need to win the climate change race we are losing (United Nations, 2020). This leads to our research question: how has IB scholarship structured environmental sustainability research, and what firm- and context-specific factors shape MNEs’ environmental strategy choices, thereby explaining the contested role of MNEs in environmental sustainability.

We aim to address these research questions by conducting a bibliometric analysis, which will lead to the development of an integrated framework by synthesising existing research in IB. Our bibliometric analysis draws from 232 articles published in 13 IB and strategy journals over the past 50 years. We delve deeper into the domain’s conceptual and intellectual structures to develop an integrated framework synthesising the representative research on corporate environmental strategy choices.

We mainly contribute to the IB literature by extending the debate on the contested role of MNEs in environmental sustainability. As Cuervo-Cazurra et al. (2021) note, MNEs are generally a force for good, but some misbehave. Our proposed novel MNE-specific 2x2 dynamic framework explains why MNEs make their good or bad environmental strategy choices. This framework is based on the dynamic, evolving roles of country- and firm-level enablers and inhibitors. The presence of both enablers leads to a race-to-the-top strategy, characterised by higher-order environmental strategy choices. In contrast, their absence (implying inhibitors) leads to race-to-the-bottom behaviour, with lower-order strategy choices. This interplay between the firm- and country-level factors becomes interesting when one is an enabler (high or present) and the other is an inhibitor (low or absent). Here, mixed strategies emerge, which depend on the evolution of these factors. This framework serves as a tool for managers to make informed decisions about their environmental strategies.

Moreover, we complement existing reviews by conducting a bibliometric analysis of the environmental sustainability literature in IB and strategy journals. The mapping of descriptive, conceptual, intellectual and social structures offers a nuanced understanding of environmental sustainability research in IB by highlighting prominent trends, authors and articles, synthesising existing research in a novel framework and providing future research opportunities. Finally, we present future research opportunities, such as examining the role of a sustainability mindset, the nature and types of institutional pressures and institutional voids.

The rest of the paper is organised as follows: the next section describes our methodological approach, and the following sections present bibliometric results and conceptual development of a 2x2 framework on environmental strategy choices. This is followed by discussion and conclusion sections.

We used the Academic Journal Guide (AJG) from the Chartered Association of Business Schools as the primary framework for journal selection, with a focus on IB and strategy journals. AJG ranks journals from 4* (highest) to 1 (lowest) across various fields of study. The IB journals included in the review, with their acronyms and rankings in parentheses, are Journal of International Business Studies (JIBS: 4*), Journal of World Business (JWB: 4) (including its predecessor Columbia Journal of World Business), Asia Pacific Journal of Management (APJM: 3), International Business Review (IBR: 3), Journal of International Business Policy (JIBP: 3), Journal of International Management (JIM: 3), Management and Organisational Review (MOR: 3), Management International Review (MIR: 3) and Multinational Business Review (MBR: 3). The AJG includes two additional journals in this category that we did not include in the review due to their focus areas. For example, the Journal of Common Market Studies (3) focuses on “international relations, politics, political economy, economics, law and sociology” (Link to the website of wiley online library). Likewise, the focus of African Affairs (3) is “politics and international relations of sub-Saharan Africa” (Link to the website of oxford academic).

Three strategy journals from the AJG rankings are included in the review. These include Strategic Management Journal (SMJ: 4*), Global Strategy Journal (GSJ: 4) and Long Range Planning (LRP: 4). Our omission of the two AJG rank 3 strategy journals (Strategic Organisation and Strategy Science) is a limitation of this study. Thus, the literature is collected from IB journals (ranked 3 or higher) and strategy journals (ranked 4 or higher), as per the AGJ-2024 ranking list. We have also collected literature from the Critical Perspectives of International Business (CPoIB: 2), which aligns with the advice that relevant journals beyond high-ranked journals should be included in the review (Michailova, 2023). All 13 journals are listed in both Web of Science (WoS) and Scopus, thereby covering both databases.

We conducted a systematic keyword search of the selected journals in WoS, without any publication time constraints. The “topic” option is chosen for the search, as it searches keywords across titles, keywords and abstracts, thereby maximising search coverage. The keywords used include: “environment* sust*” OR “sustainab*” OR “environment* resp*” OR “environmental st*” OR “environmental perf*” OR “ESG” OR “climate” OR “global warm*” OR “circular” OR “green”. This literature search yielded 733 articles. Articles needed to be directly linked to environmental sustainability to be included. Editorials, perspectives, proceeding papers, book reviews, reports and general articles on sustainable development goals (SDGs) and CSR are excluded unless they have a straightforward and substantial connection to environmental sustainability. Applying these criteria resulted in 232 usable articles from 13 IB and strategy journals spanning the past 50 years (1973–2023). The earliest usable article was published in 1973 in the Columbia Journal of World Business (Welles, 1973). The metadata for these 232 articles are exported to a local drive from WoS as a “plain text file with full records and cited references”. The metadata are then imported to Biblioshiny for further cleaning and analysis.

We undertook a bibliometric analysis of the literature, which can also be used for conceptual development (Sinkovics, 2016). Bibliometric analysis is a “quantitative approach for the description, evaluation, and monitoring of published research” (Zupic and Cater, 2015p. 430). It is a performance analysis and science mapping technique that combines classification and visualisation (Cobo et al., 2011; Zupic and Cater, 2015). It positions various elements (documents, authors, journals, words) into multiple groups and categories to create a representative research area structure and visualise the designed structures (Zupic and Cater, 2015). Science mapping reveals the structure and dynamics of the research field, whereas performance analyses present the research and publication performance of individuals and institutions (Zupic and Cater, 2015). It reduces researcher bias by adding a quantitative structure to subjective evaluations.

The most common bibliometric techniques include citation analysis, co-citation analysis, co-word analysis, co-author analysis and bibliographic coupling (Cobo et al., 2011). These techniques help analyse the conceptual (co-word analysis), intellectual (citation analysis: co-citation analysis and bibliometric coupling) and social (co-author analysis) structures of a scientific research field (Aria and Cuccurullo, 2017). Bibliometric analysis is conducted using the Biblioshiny application of Bibliometrix in R Studio (Aria and Cuccurullo, 2017).

Our broader approach is similar to that of Sinkovics (2016), who used a four-step process to develop a theory based on bibliometric mapping. We used the WoS for area specification and search, and Biblioshiney for visualisation, exploration and identification of social, descriptive, conceptual and intellectual structures. However, our conceptual development is based on articles representative of the domain. This is achieved by focusing on co-citation analysis and bibliographic coupling, where the former favours older articles while the latter incorporates recent articles (Zupic and Cater, 2015). We have focused on the most cited articles in the literature (top ten local cited and top ten global cited); bibliographic coupling (normalised local citation score one and above); and co-citation (cited three or more times). We believe this approach paints a fair picture of the domain.

The Biblioshiny data overview revealed some missing data, including four cited references, five publication years, ten digital object identifiers (DOIs), 22 affiliations, eight corresponding author details and 51 author keywords. The Bibliometrix file was downloaded as an MS Excel sheet and updated by retrieving, where available, information missing from the relevant articles. This resulted in updating two cited references, five publication years and 16 affiliations. The missing author keywords for 51 articles were manually generated from their titles and abstracts. Missing DOIs do not impact the analysis. Furthermore, similar keywords were “harmonised”. For example, “environmental strategy” and “environmental strategies” are treated as a single keyword. Likewise, four authors’ names were also harmonised (full name initials replaced in the whole data MS Excel sheet) as their first name initials differed in their publications. These authors include Aragon-Correa J and Aragon-Correa JA, Delmas M and Delmas MA, Dowell G and Dowell GWS, Inkpen A and Inkpen AC. The updated MS Excel sheet was imported into Biblioshiny for the analysis.

The sample comprises 232 articles from 13 IB and strategy journals, covering the period from 1973 to 2023, with an annual growth rate of 4.91%. It involves 500 authors, 774 author keywords and 13,217 references. On average, there are 89.15 citations per document and 2.5 co-authors per document, with 43.53% of co-authors being international. The descriptives for all 13 journals are presented in Table 1.

The Columbia Journal of World Business was renamed Journal of World Business in 2002. Both journals are treated as one journal for this study. The top five journals – JWB, LRP, SMJ, IBR and JIBS – account for about two-thirds of the sample articles. Two strategy journals (SMJ and LRP) account for over one-third of the total sample articles. Various impact indices (H index, G Index, M Index, total citations, local citations) are also reported in the table. In terms of the local impact (articles cited in the sample articles), SMJ (954), JIBS (937), JWB (381), LRP (220) and IBR (186) have the highest impact in this order.

Figure 1 presents the article production and the average number of citations per year. Annual article production shows increasing trends since 2001, with peaks in 1992 and 2021–2022. This is because of special issues published during these periods. Average citations increased from the late 1990s, with a slight decline in recent years. Citations are likely to increase again, considering the natural lag between publication and citation, as articles typically take some time to accumulate citations. Out of the total 232 articles, three were published between 1973 and 1990 (Phase 1), 30 between 1991 and 2000 (Phase 2) and the remaining during the period between 2001 and 2023 (Phase 3). JWB can be seen as a pioneer in environmental sustainability research, as it published its first article in 1973 on the need for new environmental strategies for MNEs (Welles, 1973) and a special issue on the topic in 1992, which accounts for 10 out of 30 articles published during this phase (1991–2000). Research on environmental sustainability has experienced an upward trajectory since 2001.

Most relevant authors with four or more publications each include Kolk A (nine publications – 86 local citations and a total of 1,159 citations), Aragon-Correa JA (six publications, 16 local citations and a total of 378 citations), Bansal P (four publications, 24 local citations and a total of 1,689 total citations) and Pinkse L (four publications, 42 local citations and a total of 335 citations). Another ten authors have three publications each. The top five locally cited authors are Kolk A (86), Verbeke A (43), Pinkse J (42), Christman P (34) and Taylor G (34). Authors from seven countries produced ten or more articles: the USA (58), the UK (27), China (22), Canada (20), the Netherlands (16), Spain (11) and Australia (10). USA authors’ production is far ahead of that of other countries and has consistently maintained the lead with a sharp rise in publications since 2000. Table 2 lists the top ten of 232 reviewed articles that have received the highest totals of local and global citations. Of these most-cited documents, one is from JWB, four from JIBS and the rest are from SMJ. Five articles in the top ten local and the top ten global citations relate to corporate sustainable development (Bansal, 2005), environmental strategies and responses (Buysse and Verbeke, 2003; Christmann and Taylor, 2001; Delmas and Toffel, 2008) and stakeholders’ influences (Sharma and Henriques, 2005). The top ten local cited references (Table 3) imply that IB scholars have significantly (six out of ten references) borrowed insights from management journals, notably the Academy of Management journals.

The word cloud (Figure 2) shows the main keywords in the reviewed literature. They indicate a range of research themes appearing in the literature. The size of words shows the frequency of the word used in the literature – the bigger the size, the more frequently it was used. For example, larger words such as “corporate sustainability” are used 58 times, “institutional theory” 38 times and “environmental strategy” 32 times. Figure 3 illustrates the trend topics, with bubble sizes indicating the amount of research. For example, the focus shifted from environmental regulation and performance in the early 1990s towards environmental management-related issues during the 2000–2010 period, and then, over the past decade, towards corporate sustainability, strategies and innovation.

The co-author analysis technique is used to understand collaborations, social structures and dynamics between authors. It connects authors when they co-author a paper (Zupic and Cater, 2015). The various author social groups that collaborate, and the social structure of authors’ collaboration network (denoted by G1, G2 and so on) include G1 (Sharma, Hennques, Darnall, Husted, Cuervo-Cazurra), G2 (Demirbag, Golgeci, Tatoglu), G3 (Kolk, Pinkse, Fortanier, Van-Tudler), G4 (Aragon, Hurtado, Agullera), G5 (Kerstein, Huang), G6 (Dowell, Walls, Berrone), G7 (Azzone, Bertele, Noci), G8 (Russo, Montes-Sanche, Delmas, Toffel), G8(Hartmann, Ramaswami), G9 (Verbeke, Rugman), G10 (Martenz-Ferrero, Garcia-Sacnchez) and G11 (King, Berchicci, Dowell). Most author-country collaborations are between the USA and Europe, followed by USA–China and China, and the USA and Australia.

The co-word analysis technique examines the conceptual structures and dynamics of the literature. It creates “a word co-occurrence network to map and cluster terms extracted from keywords, titles or abstracts” (Aria and Cuccurullo, 2017, p. 969). It “connects keywords when they appear in the same title, abstract, or keyword list” (Zupic and Cater, 2015, p. 432). This analysis is presented using a co-occurrence network, a thematic network, thematic evolution, a thematic map and factorial analysis.

The co-occurrence network (Figure 4) reveals corporate sustainability, environmental strategy and institutional theory as the primary keywords and themes, with other keywords and themes connected to them. For example, various nodes linked to the environmental strategy include performance/competitiveness, capabilities, regulations, corporate environmentalism, environmental intelligence and innovations. The corporate sustainability cluster has other major connected themes, such as MNEs and climate change, as well as minor themes, including sustainable development, CSR, alternative energies, emerging markets and the SDGs. The third cluster focuses on institutional theory, which is connected to environmental management, green innovations, foreign direct investment (FDI), resource-based views and emerging market firms. Moreover, institutional theory is strongly linked to corporate sustainability and environmental strategy. Two other small network clusters are on the environment: country- and firm-specific advantages, corporate strategy and environmental capabilities. Similar themes to those of the first 30 years have been studied during the past 20 years, with one notable change: a consolidation and focus on the main themes (Figure 5). Recent focus has been on corporate sustainability, and environmental, corporate and collaborative strategies.

A thematic map presents the main themes in four quadrants based on centrality (relevance) and density (development) (Figure 6), while factorial analysis with multidimensional correspondence analysis summarises the keywords and themes into a few clusters (Figure 7). The motor themes with centrality and high density include three clusters: collaborative strategy and outcomes, institutional theory and FDI and emerging market firms. Themes with high centrality and low density are called basic themes. Five themes appear in this cluster: institutional theory and environmental strategy; corporate sustainability and MNEs (including climate change and sustainable development); corporate environmental responsibility; corporate governance; and CSR. The emerging or declining themes (low density, low centrality) include stakeholder theory and the USA. Absorptive capacity, sustainability reporting and triple bottom line appear as niche themes (low centrality, high density). Among the four main clusters (Figure 7) in environmental sustainability research, the first is corporate sustainability and environmental performance. It also includes studies on corporate governance, internationalisation, national cultures and emerging markets. The second cluster is on environmental strategy, including non-market strategies and resource-based view perspectives. The third cluster includes studies on MNEs and environmental sustainability. Environmental sustainability, which focuses on green consumers, SDGs and IB, constitutes the fourth cluster. Environmental capability, natural environment, country- and firm-specific advances are a few additional themes that can be theoretically discussed within the existing four clusters.

Citation analysis examines the intellectual structures and dynamics of a research field. It helps to know the most influential works in the field. It comprises co-citation analysis and bibliometric coupling. When both articles are cited in a third paper, it is called co-citation, while bibliometric coupling occurs when at least one cited source appears in the reference list of both papers (Aria and Cuccurullo, 2017). Co-citation and bibliometric coupling are complementary techniques because the former is more relevant for mapping older works that have had time to gather citations, and the latter is more applicable to the current research front (Zupic and Cater, 2015).

Figure 8 (co-citation) shows four article clusters cited together three or more times. Some of the highly influential articles (highest betweenness centrality) include works relating to global environmental policy (Christmann and Taylor, 2001; Rugman and Verbeke, 1998b), corporate environmental strategy (Aragón-Correa and Sharma, 2003; Bansal, 2005; Christmann, 2000; DiMaggio and Powell, 1983; Hart, 1995), SDGs and CSR in general (Kolk, 2016). Based on bibliographic coupling (Figure 9), some of these works with the highest influence (normalised local citation score of two or more) include MNEs and environmental sustainability, IB and SDGs (Ramirez, 2021), environment strategy and performance outcomes (Aragon-Correa and Rubio-Lopez, 2007; Bansal, 2005; Delmas and Toffel, 2008; Rugman and Verbeke, 1998b) and institutional aspects of environmental sustainability (Arora and De, 2020; Bocken and Geradts, 2020; Hartmann and Uhlenbruck, 2015; Kolk and Pinkse, 2008; Li and Zhou, 2017; Maksimov et al., 2022; Tatoglu et al., 2014).

Three common themes across various analyses are corporate sustainability, corporate environmental strategy and institutional theory. The corporate sustainability theme also includes research keywords on sustainable development, climate change, alternative energy, corporate governance, business and the environment, institutions, SDGs and IB environment. The second theme, corporate environmental strategy, encompasses related research keywords such as corporate environmentalism, environmental intelligence, capabilities, environmental regulations, performance and competitiveness. The third theme on institutional theory also includes related topics such as non-market strategy, collaborative strategy, green innovation, resource-based view, environmental management, internationalisation and FDI. For our conceptual development, we have converted these analyses, which are based on first-order themes and sub-themes, into second-order theoretical themes and sub-themes (Gioia, 2021). These second-order theoretical themes on firm- and country-level enablers, inhibitors and context enable us to propose our 2x2 framework on MNEs’ environmental strategy choices. Various firm- and country-level factors have been discussed as subthemes.

Corporate environmental sustainability primarily focuses on the environmental dimension, and the resulting corporate environmental strategy involves including environmental considerations in business strategy (Buysse and Verbeke, 2003; Sharma and Henriques, 2005). Hart (1995) proposed four environmental strategies, namely, the end-of-pipe approach, pollution prevention, product stewardship and sustainable development. The end-of-pipe approach is reactive and compliance-driven, focusing on product and manufacturing process improvements to meet legal requirements. It requires fewer resources compared to the other approaches. The pollution prevention approach is also reactive and compliance-driven, aiming to achieve continuous adaptation and improvement to reduce pollution levels below legal requirements at a lower cost. These first two approaches are cost leadership strategies. The third approach to product stewardship is a differentiation strategy. It aims to minimise the adverse environmental effects throughout the product life cycle, from cradle to grave. Finally, the sustainable development approach is proactive, involving innovations and clean technology developments to minimise the adverse environmental effects of growth. Other scholars have developed similar strategy typologies, such as passive and lobbying-based, reactive, anticipatory and innovation-based strategies (Azzone et al., 1997); resource-based reactive, pollution prevention and environmental leadership strategies (Buysse and Verbeke, 2003); and pollution control, eco-efficiency, rec-circulation, eco-design, ecosystem stewardship and business redefinition strategies (Sharma and Henriques, 2005).

Yu et al.’s (2023) typology, consisting of reducing, replacing and regenerating, focuses on the sustainable use of natural resources. The reducing strategy builds efficiencies to lower costs and enhance short-term profitability. The replacement strategy helps create more value and supports long-term growth. The regenerating strategy enables understanding and working within the broader systems, leading to environmental and business sustainability. On the other hand, the typology of circumventing, copying and compensating strategies (Becker-Ritterspach et al., 2019) focuses on environmental institutional voids. Circumvention can be undertaken by non-introduction or withdrawal, while coping may lead to internalisation or internal substitution of institutional voids that matter. The compensation may include related, unrelated or symbolic compensations.

We have summarised these approaches (Table 4) as higher-order and lower-order environmental strategies. Higher-order strategies include resource-based, proactive and anticipatory strategies that aim to achieve differentiation advantages. They require significantly higher capital investment and are subject to more regulations than social practices, thus requiring coordination at multiple levels (Walls et al., 2012). Conversely, lower-order strategies are reactive, passive and compliance-driven. They aim for minimal adaptations and improvements to maintain cost leadership, requiring relatively limited resources and investments compared to higher-order strategies. This simplified categorisation enables us to present a framework for why managers choose higher- or lower-order environmental strategies.

Green resources and capabilities, stakeholder engagement and management perceptions and consciousness have been established as firm-level enabling factors leading to higher-order environmental strategies.

Developing green resources and capabilities is a non-location-bound resource, a prerequisite for green success (Rugman and Verbeke, 1998a). The environmental performance depends on green capabilities, that is, various configurations of firms’ potential to leverage from environmental resource commitments (weak vs strong) and flexibility of resource commitment (weak vs strong) (Rugman and Verbeke, 1998a); when both are strong, that is the case of the green success scenario. In contrast, when both are weak, that is an irreversible green mistake that firms need to avoid. The low flexibility with high leverage potential is a green gamble, where lobbying and first-mover advantages may be helpful. However, if flexibility is high and potential is low, it will be a reversible green market.

Global connectedness helps create dynamic green capabilities by leveraging the knowledge advantage gained from such connections (Maksimov et al., 2022). Dynamic capabilities enable sustainable business model innovations (Teece, 2018), enhancing environmental strategy and performance outcomes (Bocken and Geradts, 2020). Furthermore, environmental technology portfolio (Klassen and Whybark, 1999), digital technologies (Ciulli and Kolk, 2023) and industry 4.0 (Luo and Zahra, 2023) are firms’ resources and capabilities that have been found to enhance environmental performance. Global sustainability offers firms opportunities to develop green resources and capabilities, and reconfigure them as a source of competitive advantage (Kolk and Pinkse, 2008).

The relative significance of stakeholder engagement capability in adopting environmental management strategies depends on firms’ strategy profiles. Environmental leadership strategy profiles need less stakeholder engagement concerning regulations and international agreements. In contrast, pollution prevention firms will require much more because environmental leadership firms leverage changing norms and expectations rather than managing regulations (Buysse and Verbeke, 2003). Furthermore, international customers influenced all strategy profiles. In contrast, the influence of global competition was stronger for MNEs than for domestic firms (Buysse and Verbeke, 2003). Stakeholder influences on environmental strategy also depend on the firm’s stakeholder dependence and vice versa (Sharma and Henriques, 2005). Other organisational capabilities, such as stakeholder integration, continuous higher-order learning and continuous innovation, also lead to proactive responses to business and environmental issues, thereby enhancing competitiveness (Sharma and Vredenburg, 1998).

Furthermore, managerial and stakeholder perceptions, cognitions and environmental consciousness also drive environmental strategy profiles. Environmental-conscious consumers motivate MNEs to enhance their environmental performance by presenting environmentally differentiated products (Delmas et al., 2007). Studies have established the impact of managerial perceptions (Sharma and Henriques, 2005) and a manager’s internal environmental orientation (e.g. values, ethical standards, personal inspirations and green sensitivity) (Chan, 2010; Leonidou et al., 2015) on the adoption of environmental strategies. The managerial monitoring of early success or failure and the subsequent adjustment of strategy lead to enhanced environmental performance (Branzei et al., 2004). However, Cordano et al. (2010) argued that, even though managers may have good intentions, they may face barriers to adopting green practices. They argue that managers’ attitudes, norms and perceptions of stakeholder pressure impact their intentions to implement environmental management programmes.

Corporate governance – through the roles of owners, managers and stakeholders – shapes firms’ environmental performance and the adoption of higher-order environmental strategy choices. Governance mechanisms differ between firms that meet only regulatory requirements and those that exceed environmental demands (Walls et al., 2012). Publicly-traded facilities face lower adoption costs due to stronger capabilities, while government and privately-owned facilities incur higher costs (Darnall and Edwards Jr, 2006). Foreign firms in the USA generate and manage more waste than domestic firms, with waste levels increasing further when operations span multiple locations (King and Shaver, 2001). These findings challenge Porter’s hypothesis that stringent home-country regulations improve performance, indicating that the pollution havens explanation is incomplete (Porter and van der Linde, 1995). Moreover, geographic dispersion exacerbates environmental harm (King and Shaver, 2001), whereas foreign institutional investors and family legacy naming both positively influence firms’ environmental strategies (Ellimaki et al., 2023; Saeed et al., 2023).

The nature of strategic responsiveness also determines corporate environmental performance (Jeremiah et al., 2023). The benefits of environmental differentiation are not universal, as previously assumed, but rather depend on the interaction between competitive strategy and market competition intensity (Duanmu et al., 2018). Furthermore, the partnership between business and environmental groups works better if there are market incentives for environmentalism (Hartman and Stafford, 1997). Moreover, a sustainability-oriented organisational culture (Linnenluecke and Griffiths, 2010), environmental policies and supportive supervisors (Ramus, 2002) positively influence corporate sustainability (Linnenluecke and Griffiths, 2010). Finally, firms with an environmental risk management strategy as part of their overall risk management enjoy a lower weighted average cost of capital and greater leverage (the ability to take on more debt) because of their improved environmental performance (Sharfman and Fernando, 2008). Thus, an effective environmental strategy yields financial market rewards, improved resource efficiencies and institutional legitimacy.

Various country-specific factors, including regulations, natural resources, market conditions, institutional pressures, institutional logic and institutional voids, have been identified as both enablers and inhibitors of higher-order environmental strategy choices.

The stringency of environmental regulations, which vary across countries, may enable or inhibit higher-order strategy choices depending on the economic benefits of these choices (Rugman and Verbeke, 1998b). Firms comply with environmental standards (lower-order choices) even when there are lower economic benefits. The regulatory enforcements are sanctions-driven. If these sanctions are based on supranational trade discipline, then firms will selectively comply or may even not comply if their behaviour driver is based on performance. If regulations are non-binding, then higher economic benefits will lead to performance-driven compliance behaviour. It implies that the stringency of regulations is effective in promoting environmental compliance behaviour, especially if the net resultant benefits are not favourable in the short term.

However, the impact of regulatory stringency on country attractiveness and environmental strategy choices also depends on the nature of these regulations, that is, whether they strengthen or weaken country- and firm-specific enablers. For example, Rugman and Verbeke (1998a) suggested that strict regulations resulting in weakened country attractiveness and weakened or neutral firm attractiveness lead to the declustering case, where MNEs shift production and outward FDI, and increase imports (lower-order choices). However, suppose weak regulations strengthen a country’s attractiveness while weakening or neutralising a firm’s attractiveness. In that case, it is a pollution-haven effect, resulting in more inward FDI and exports (lower-order choices). On the other hand, if strict regulations strengthen a country’s attractiveness and encourage a firm’s enablers, then this is a case of an environmental innovation cluster (higher-order choices). Finally, if strict regulations strengthen both country- and firm-enablers, then it is a case of strategic environmental policy (higher-order choices).

Various institutional pressures in a given country also act as enablers for undertaking higher-order choices in those locations. For example, the stringency of regulations creates regulatory institutional pressure, which plays a more significant role when resources are scarce. Regulatory pressures are most important for pollution prevention strategies, and their importance declines for an advanced proactive environmental leadership strategy (Buysse and Verbeke, 2003). This is because higher-order choices are based on managerial visions and leadership, while lower-order choices require more coercive power to push these firms towards higher-order choices. A government’s voluntary environmental programmes are also institutions that may pressure firms to adopt environmental strategies by guiding them towards a specific environmental behaviour considered rational (Delmas and Toffel, 2008). Other pressures that have a positive influence on adopting environmental responsibilities include global non-governmental organisations (NGOs) (Walls et al., 2012), globalisation and customer pressures (Christmann and Taylor, 2001).

Institutional pressures may lead to divergence in environmental practices from the traditional convergence logic. This is because of differences in institutional fields: early joiners are more interested in technological efficiency, while late joiners are more concerned with legitimacy (Delmas and Montes-Sancho, 2010). Institutional changes towards deregulation reshape competitive landscapes and thus impact a firm’s strategic choices (Delmas et al., 2007). Moreover, steady and growing market conditions provide fertile ground for adopting innovative resource-efficiency strategies, while perceived economic downturns lower the potential for such adoption. However, the adoption rate in downturn market conditions is relatively higher for firms that focus on cost leadership strategies, conduct internal research and are vertically integrated (Delmas and Pekovic, 2015).

The above discussion is summarised in Figure 10, which highlights the leading firm and country-level factors. The underlying context for factors is presented in parentheses. Managerial perceptions, cognitions and consciousness are firm-level enablers. However, we position it as a broader context for both firm and country-level factors, as the managerial sustainability mindset can affect the utilisation of any factor that influences corporate environmental strategy choices.

The above discussion highlights various firm- and country-level enablers and inhibitors of the adoption of higher-order environmental strategies. It is not just the firm or country-level factors; their interaction influences environmental strategy choices (Kolk and Pinkse, 2008). Figure 11 presents a dynamic 2x2 matrix for making environmental strategy choices. For example, when both country- and firm-level enablers are present, firms will adopt higher-order strategies (Quad A), demonstrating a race-to-the-top behaviour. Conversely, lower-order strategies (Quad C) will be chosen when both country- and firm- level inhibitors are present, leading to a race-to-the-bottom approach. In the case of Quad B (country-level enablers, firm-level inhibitors), either the firm will develop its enablers (e.g. green innovations) and move to Quadrant A, or it will engage in lower-order strategies due to the lack of appropriate green resources and capabilities. In the case of Quad D, the firm can use higher or lower-order strategies. It can also lobby and engage in political strategy to help the country towards enablers. It can raise the game for competitors, and the firm can benefit from higher firm-level enablers. Thus, environmental strategy choices are dynamic and will evolve as configurations of country- and firm-level enablers and inhibitors change.

We engaged with Gen AI (ChatGPT) to explore examples for each of the proposed framework’s four quadrants. We also conducted due diligence and checks to ensure the examples are relevant and accurately explain our framework. Unilever (the Netherlands/UK) demonstrates Quad A strategy choice with strong firm and country-level enablers and the “race to the top” strategic behaviour. Their sustainable living plan, financial incentives tied to environmental, social and governance performance, and a strong corporate culture with regard to long-term sustainability are good examples of their firm-level enablers. At the country level, the EU’s strict environmental regulations and consumer demands for sustainability provide country-level enablers. Exxon Mobil (USA) and Coca-Cola (USA) demonstrate the other extreme of the race to the bottom (Quad C) behaviour, where country and firm-level inhibitors lead to environmentally harmful decisions, that is, lower-order strategies. For example, historically weaker federal climate policies, the oil industry’s power and the market’s reliance on fossil fuels act as country-level inhibitors. Conversely, firm-level factors such as a short-term profit focus, shareholder pressures and the availability of strong fossil fuel infrastructure to firms act as inhibitors.

Quad B illustrates mixed strategic behaviour of adopting lower-order strategies or building capabilities to move to higher-order strategies. For example, Toyota’s (Japan) slow adoption of electric vehicles is due to internal doubts (firm-level inhibitors) despite the country’s strong support for environmental sustainability. Country-level pressures and low firm capabilities also led Volkswagen (Germany) to engage in data manipulation and greenwashing. Building an internal supportive culture and capabilities could enable these firms to adopt higher-order environmental sustainability strategies. For example, in response to initial criticisms, Nestlé (Switzerland) has developed capabilities to shift towards a higher-order strategy, including the Net Zero Roadmap to reduce emissions by 2050, investment in regenerative agriculture and a commitment to 100% recycling or reusable energy.

Finally, in the present of firms-level enablers and country-level inhibitors (Quad D), firms have been found to follow mixed strategies. They follow a lower-order strategy according to the country environment in which they operate – for example, McDonald’s (USA, Global) and Tesla (USA, China, Global). They enforce their sustainability practices in accordance with the regulations in the respective countries. Some MNEs also lobby to strengthen the country-level enablers. For example, by leveraging its influence, Unilever improved environmental standards in its supplier nations. Despite country-level inhibitors, some firms adopt higher-order practices. For example, IKEA has upheld environmental standards despite local challenges.

We have aimed to provide a comprehensive understanding of environmental sustainability research in IB and strategy, as well as the role of MNEs in advancing environmental sustainability. To achieve this, we have discussed the descriptive, conceptual and intellectual structures; presented a novel 2x2 MNE-specific dynamic framework for environmental strategy choices; and suggested some future research opportunities. Our proposed framework contributes to the debate over the contested role of MNEs in advancing environmental sustainability.

MNEs are under scrutiny amid rising societal expectations for their contested role in advancing environmental sustainability (Pinkse et al., 2010; Martinez-Ferrero and Garcia-Sanchez, 2017; United Nations, 2020). On the one hand, MNEs contribute to global growth and to the technological innovations that improve environmental sustainability (Ghauri et al., 2021). On the other hand, they also misbehave and contribute disproportionately to the environmental crisis because of their economic motivations (Cuervo-Cazurra et al., 2021; Yu et al., 2023). Moreover, some scholars (Allen et al., 2025; Yu et al., 2023) argue that MNEs possess the necessary resources and global reach to address this challenge. In contrast, others (Kano et al., 2025; Zaheer, 2025) argue that it is not that simple because of the context and complexities of IB, where multi-level factors ranging from firm to industry, and macro-institutional level interdependencies shape MNEs’ strategic choices. If MNEs are generally a force for good (Cuervo-Cazurra et al., 2021), then why are some MNEs contributing by adopting higher-order environmental strategies, while others are harming the environment by adopting lower-order strategies?

We add to this debate by proposing an MNE-specific dynamic 2x2 framework for their environmental strategy choices. Our proposed framework explains that a combination of firm- and country-level enablers and inhibitors, along with the potential context and dynamism of the operating environment, determines MNEs’ environmental strategy choices. The presence of firm- and country-level enablers leads MNEs to adopt higher-order strategies. In contrast, the absence of these enablers or the presence of inhibitors leads to lower-order strategies. The framework suggests a mixed behaviour when MNEs face a mix of firm- and country-level enablers and inhibitors. Our framework aligns with the country-specific advantages (CSA) and FSA framework (Rugman and Verbeke, 1992, 1998a). The CSA-FSA framework highlights that an MNE’s international strategy depends upon the development and deployment of FSAs through the selective exploitation of CSAs across locations. Our firm- and country-level enablers and inhibitors are similar to firm- and country-specific advantages and disadvantages, with a focus on MNEs’ environmental strategies. Our framework also aligns with the environmental strategic role orientations proposed by Sharma (2025), who argues that MNEs’ choice of a specific role orientation in environmental strategy depends on the interplay between institutional pressures and a firm’s green resources and capabilities.

The novelty of our proposed framework lies in its dynamic nature and specificity to MNEs. The dynamism lies in the changing nature of the firm- and country-level factors, as well as their interactions, leading MNEs to make different strategic choices. Their evolutions will enable MNEs to switch strategy choices. For example, if country-level inhibitors evolve into enablers, MNEs are likely to adopt higher-order strategies. MNEs have the unique ability to shift operations based on the location’s attractiveness. This enables them to use institutional arbitrage in adopting their environmental strategies (Cuervo-Cazurra et al., 2021). Moreover, country-level enablers can also help MNEs develop relevant firm-level enablers (Yu et al., 2023). For example, firms develop green capabilities in stringent environments but often lack these capabilities in less stringent environments (Porter and van der Linde, 1995; Rugman and Verbeke, 1998b). These helps take first-mover advantages abroad. It will not be convenient for other countries to catch up quickly on environmental regulations. However, Christmann and Taylor (2001) suggest that even in lax environments, firms adopt environmental strategies because global institutional pressures drive their self-regulation. Furthermore, even firm-level enablers can impact country-level enablers. For example, MNEs can use industry-level corporate political strategies to influence government policies (for example, greenhouse gas regulations) in their favour, thereby supporting their environmental strategies (Patnaik, 2019).

We enhance the debate on the contested role of MNEs by explaining why MNEs choose specific environmental strategies and what enables them to move to higher-order choices. It can also be a valuable guide for managers in selecting and switching their environmental strategy as firm- and country-level enablers and inhibitors evolve. The environmental strategy choices depend on the configuration of firm- and country-level enablers and inhibitors, their evolution and the underlying context. The proposed configurations and strategic choices are based on managerial perceptions, so managers must balance the potential contributions and risks.

Based on this review, we suggest some future research opportunities. We call for empirically examining the proposed environmental strategy choices to create empirical, evidence-based profiles of these strategic decisions. Furthermore, examining contextual factors in strategy choices may help debunk the myths that suggest straightforward relationships (Aragon-Correa and Rubio-Lopez, 2007). Rich opportunities exist to examine contextual explanations to debunk myths and provide a nuanced understanding of the phenomenon. The literature has established a range of contingency factors, such as the mediating (mechanisms) role of internal and external environmental forces (Leonidou et al., 2015) and environmental innovations strategy (Eiadat et al., 2008), moderating (catalyst) role of early vs late adopters of environmental voluntary programmes (Delmas and Montes-Sancho, 2010), and interactions of formal and informal macro institutions (Orcos et al., 2018).

Developing and testing the role of the managerial sustainability mindset is an important area to examine because strategy choices, particularly in mixed strategy quadrants, also depend on top managers’ sustainability mindset. It is that mindset that enables ethical decision-making because such decisions are ethical choices and may not be legal requirements. The literature highlights the role of managerial perceptions, cognitions and environmental consciousness (Branzei et al., 2004; Cordano and Frieze, 2000; Cordano et al., 2010; Leonidou et al., 2015). Developing a managerial “sustainability mindset” that incorporates environmental, social and economic perspectives could be a key tool in adopting environmental strategies. There is an opportunity to extend the “global mindset” (Levy et al., 2007) to a “sustainability mindset”. A sustainability mindset will involve environmental orientation in addition to managers’ cultural and economic orientations.

Other contextual factors seeking further examination include the direct and interactive role of the nature and type of institutional pressures such as normative pressures (Berrone et al., 2013; Hartmann et al., 2021), formal and informal pressures (Amer, 2023), regulatory stringencies and monitoring (Wang et al., 2018) and NGOs and market freedom (Hartmann and Uhlenbruck, 2015). Of course, firms respond differently to these pressures based on the availability of their green resources and capabilities (Berrone et al., 2013). The role of country-level institutional logics (Bu et al., 2023), and often conflicting institutional logics (Milosevic et al., 2023) are other important areas to explore. Furthermore, another interesting area is on how MNEs fill, use or exploit institutional voids in determining their environmental strategy choices (Ascani et al., 2023; Becker-Ritterspach et al., 2019; Li and Zhou, 2017; Pinkse and Kolk, 2012).

Some MNEs are racing to the bottom (Link to the website of Earth.org/), others are racing to the top (Link to the website of Earth.org; www.forbes.com/lists/net-zero-leaders/?sh=73ac8ec055de), and still others are adopting mixed strategies. Understanding the direct, interactive and dynamic effects of firms and country-level enablers and inhibitors, along with the underlying context, will enable managers to adopt appropriate environmental strategies and transition from lower to higher-order ones. Our proposed framework, along with the accompanying contextual discussion, allows managers to make informed environmental strategic choices, potentially leading to higher-order choices even if they do not yield short-term profitability.

Our findings should be interpreted cautiously due to some limitations of our study. Our synthesis is based on research appearing in selected IB and strategy journals. Future efforts need to synthesise environmental sustainability research from a wide range of IB and strategy journals, as well as journals from other related domains such as management and marketing. The use of multiple databases and a multidisciplinary review can provide more comprehensive insights. Moreover, more stringent journal inclusion and exclusion criteria and the addressing of self-citations will further enhance the rigour of such analysis. Having said that, our synthesis provides a comprehensive mapping and synthesis of environmental sustainability research published in the selected journals. In addition, we suggest future research opportunities that require the attention of IB scholars.

Environmental sustainability is a grand challenge that MNEs have partnered with through the United Nations SDGs to contribute their bit to addressing it. They have moral, social and even legal obligations to help address this challenge. As societal expectations are increasing (Marano, et al., 2024), MNEs can play a significant role (Van Zanten and Van Tulder, 2018). This is the race we cannot afford to lose (United Nations, 2020).

I have not used GenAI in developing this paper, except for section 4.4 to explore potential examples for the proposed framework. I have clearly stated this in the paper.