Chapter 5 shifts the focus from climate risks to the business opportunities emerging from a warming world. The chapter proposes three pillars of sustainable business opportunity: early adopters that gain advantage through innovation and transition readiness, green markets that capitalize on emerging demand for low-carbon goods and services, and climate solutions that provide technologies or services addressing mitigation and adaptation challenges. Additional avenues, such as resilient infrastructure, climate risk consulting, and insurance services, illustrate the breadth of new markets generated by climate pressures. The chapter concludes that firms willing to invest in transformation will be best positioned to thrive as temperatures continue to rise.

Chapter 3 analyzes the diverse and interconnected risks that climate change poses to multinational corporations. It distinguishes among four primary risk categories: physical, transition, reputational, and litigation. Physical risk stems from climate-related disasters and long-term environmental degradation that disrupt operations and supply chains. Transition risk arises from shifting policies, technologies, and market preferences as economies decarbonize. Reputational risk emerges when stakeholders judge firms’ climate performance, while litigation risk reflects growing legal accountability for environmental damage and disclosure failures. The chapter also highlights the indirect effects of climate change on human health, macroeconomic stability, and social and political conditions in host countries. These cascading impacts amplify uncertainty and reshape global business environments. Together, the discussion situates climate change as a multidimensional systemic risk, establishing the analytical foundation for understanding firms’ adaptive and strategic responses in subsequent chapters.

Chapter 10 explores how international public policy can unlock business opportunities for multinational corporations against the backdrop of rising global temperatures. The chapter examines how international climate agreements and climate-oriented foreign aid support the growth of green industries through targets, incentives, signaling effects, and direct financial assistance. It argues that well-designed international frameworks mobilize capital and create enabling ecosystems that support innovative and forward-thinking firms. The discussion then turns to the mechanisms through which intergovernmental organizations collaborate with firms to advance climate solutions. Three forms of engagement are highlighted: cross-sectoral alliances that link governments, businesses, and civil society, innovative financing mechanisms that reduce risk and crowd in private capital, and research, development, and knowledge-sharing platforms that accelerate the diffusion of low-carbon technologies.

Chapter 4 develops a framework for understanding how multinational corporations (MNCs) manage climate risks. It identifies five distinct strategies: accepting the risk as a cost of doing business, adapting through proactive investments or compliance measures, transferring risk to other actors, diversifying operations geographically, and avoiding risk by limiting exposure to vulnerable regions. After outlining the logic and trade-offs of each approach, the chapter investigates whether firms systematically avoid the countries that are most exposed to climate threats. Using cross-national data on foreign direct investment, the analysis explores variation across sectors and dimensions of climate vulnerability, such as ecosystem, infrastructure, and water-related risks. The findings demonstrate that MNCs avoid climate-vulnerable countries, while also showing that firms’ risk management strategies vary by sector and climate risk type.

Chapter 8 explores how national governments can help multinational corporations seize emerging opportunities in the low-carbon transition. Building on the prior chapter’s discussion of governance and planning, capacity building, and incentives and regulations, the chapter examines how public policy in these domains can foster sustainable business opportunities. It highlights several specific policy instruments: climate-focused economic zones (governance and planning), green technology and innovation funds (capacity building), and public procurement and regulatory sandboxes (incentives and regulations). The chapter concludes by assessing how firms and governments can collaborate to generate mutually reinforcing climate outcomes, emphasizing public–private partnerships (PPPs) as key vehicles for innovation and risk-sharing. Case studies of Japan’s Fujisawa Sustainable Smart Town, Norway’s Northern Lights CCS project, and California’s ARCHES hydrogen alliance illustrate distinct PPP models.

Chapter 1 introduces the central puzzle of the book: how multinational corporations confront the growing risks and opportunities of climate change. It establishes the urgency and global salience of the issue, situating the discussion within international business and political economy scholarship. The chapter reviews existing literature, identifies key knowledge gaps, and formulates the research questions that guide the study. It then presents the book’s overarching analytical framework, integrating resource dependence theory with a typology of climate risks and corporate response strategies. By linking firm-level decision-making to national capacity and international engagement, this introduction explains how the subsequent chapters contribute to theory and practice. It concludes by highlighting the book’s dual purpose: to advance academic understanding of business strategy under climate stress and to draw actionable lessons for policymakers and business leaders.

Chapter 2 examines the dual roles that multinational corporations (MNCs) play as both contributors to and potential mitigators of climate change. Framed around the competing race to the bottom and race to the top perspectives, the chapter explores how MNCs can both weaken and strengthen environmental governance. The first section reviews evidence of firms lobbying for weaker standards and relocating pollution-intensive operations to jurisdictions with lax regulation. The second considers how MNCs may instead diffuse clean technologies and practices through supply chains and host-country spillovers. The chapter argues that these divergent outcomes depend on a set of internal and external moderating factors. Internally, industry characteristics, firm capabilities, and consumer orientation shape corporate environmental behavior. Externally, national institutions, stakeholder pressures, international agreements, levels of economic development, and corruption influence whether MNCs produce downward or upward environmental convergence.

Chapter 11 concludes the book by synthesizing its central arguments and highlighting broader implications for business, policy, and scholarship. It reiterates four key themes: first, climate change management and economic growth are not inherently at odds, second, climate change creates both risks and opportunities for multinational corporations (MNCs), third, climate pressures are reshaping firms’ resource dependencies, and fourth, MNCs can play pivotal roles in advancing climate solutions. The chapter reflects on the book’s contributions to international business, development studies, and global political economy. It also outlines the study’s limitations and identifies promising avenues for future research. The book concludes with a call for action, urging public and private actors to embrace innovation, cooperation, and long-term planning to achieve sustainable prosperity and advance climate solutions.

Chapter 7 investigates how national governments can reduce corporate exposure to climate risks through public policy. It identifies three categories of policies that potentially reassure investors: governance and planning, which encompass national climate strategies and institutional coordination, capacity building, which includes disaster preparedness and public infrastructure for resilience, and incentives and regulations, such as environmental standards and climate-related fiscal policies. The chapter examines whether these policies moderate the negative relationship between climate vulnerability and foreign direct investment identified in Chapter 4. Using cross-national empirical analysis, it finds that in countries where these policy areas are relatively strong, investors’ concerns about climate risk are significantly mitigated. These results suggest that government-led adaptation efforts can serve as credible signals of state capacity and long-term stability, thereby strengthening confidence among multinational firms operating in or entering climate-vulnerable economies.

Chapter 6 examines how leading energy companies have responded to pressures to decarbonize and transition to sustainable energy. Through comparative case studies of ExxonMobil, Saudi Aramco, and Ørsted, the chapter highlights three distinct strategic pathways. ExxonMobil exemplifies a business-as-usual approach, maintaining a primary focus on oil and gas production while investing selectively in carbon capture and storage to mitigate emissions. Saudi Aramco represents a diversification strategy, positioning itself as a broader energy company by expanding into renewables and low-carbon technologies while continuing to rely heavily on hydrocarbons. Ørsted serves as a pioneer of full transition, having moved fully away from fossil fuels to become a leader in wind power generation. Together, these cases illustrate the range of corporate responses to climate pressures, while demonstrating how factors such as resource dependencies, state ownership, and market positioning shape strategic choices in the evolving global energy landscape.

Chapter 9 examines how international public policy affects climate-related investment risks. It focuses on two key mechanisms: international climate agreements (ICAs), such as the Kyoto Protocol and the Paris Agreement, and climate-oriented foreign aid. The chapter analyzes how participation in ICAs and the receipt of climate aid influence investor behavior, asking whether these forms of international engagement moderate the negative relationship between climate risk and foreign direct investment observed in earlier chapters. Empirical findings indicate that both ICA membership and climate aid inflows significantly reassure foreign investors by signaling host countries’ access to resources and their commitment to managing climate vulnerabilities. The chapter also highlights several limitations of ICAs and climate aid before offering suggestions to improve their effectiveness.

Chapter 6 offers an empirical analysis of stewardship disclosures under the UK Stewardship Code, using text analytics – including text length, readability, phrase overlap, lexical similarity, frequency analysis, and structural topic modelling – to examine reporting under the 2012 and 2020 iterations. It reveals shifts in narrative style, thematic focus, and institutional engagement. Topic modelling shows a move from governance-centric narratives in 2012 to a broader thematic repertoire in 2020, including ESG integration, multi-asset stewardship, and systemic risk. While the UK Code 2020 prompted more reflective disclosures in some cases, others remain formulaic, relying on generic language and procedural reporting. Patterns of convergence and divergence reflect institutional type, resources, and stewardship capacity. The analysis underscores both the promise and limits of stewardship reporting – highlighting its role in fostering innovation and reflection, while exposing challenges in achieving consistent, meaningful implementation. By unpacking form and substance, the chapter contributes to debates on institutionalising stewardship as a credible mechanism of investor accountability and long-term public value.