Impact of business strategy on carbon emissions: Empirical evidence from U.S. firms

Abstract

This study examines the nexus between business strategy and carbon emissions by utilising a dataset of U.S. firms from 2007 to 2020. It focuses on two broad types of firms, that is, prospectors and defenders. Regarding carbon emissions, we consider total emissions (Scope 1 & 2), direct emissions (Scope 1) and indirect emissions (Scope 2). The results reveal a significant association between business strategy and total carbon emissions as well as direct carbon emissions. Notably, the results suggest that prospectors, compared to defenders, display higher levels of total and direct carbon emissions. Our findings contribute to the debate on whether prospectors in developed countries mismanage sustainability issues. The study offers valuable insights into the interplay between business strategy and carbon emissions and provides empirical evidence that business strategy is an important determinant of total and direct carbon emissions.