Abstract
The growing consensus among scientists and governments on the need for immediate action to avoid the dangerous impacts of climate change has resulted in many industries starting to prepare for a carbon-constrained world, in order to analyse the effectiveness of industry response, this research has developed a theoretical framework to categorise corporate strategies on climate change in developing and industrialized countries. The framework classifies the corporate response into four sets of strategies based on their operational and management activities. The empirical data was collected from 180 companies trough a questionnaire survey in Pakistan and the UK. Twenty-four interviews with representatives from industries and other stakeholder groups were also conducted to triangulate and complement the survey results. An analysis of the empirical data indicates that corporate responses towards climate change can be characterized in four categories: indifferent, beginner, emerging and active which validates the theoretical framework. The research found that business responses to this international challenge depend on national policies, economic, social, and technological related factors. However, the strength and content of these factors varies between industrialized and developing countries, where corporate environmentalism is a relatively new phenomenon. For Pakistan, the findings suggest that, in the absence of regulatory and societal pressure, the only effective incentive for organizations is cost-savings tlirough energy efficiency projects. However, their response is shaped by the prevalence of obstacles and a lack of external pressure that prevent a different picture to emerge. The situation is different for the UK. Due to regulatory pressure, UK firms are actively involved in GHG management activities. However, climate policies concerning industries for instance, EU ETS, do not provide sufficient incentives to companies to change from 'business as usual' because of its short-term outlook, uncertainty, complexity and the generous allocation of allowances, hence very low carbon price.