Are multinational corporations the ‘missing link’ in global climate governance?

For decades, multinational corporations have largely been seen as profit-driven entities —operating across borders, employing large workforces, and driving technological progress. Although many of them have incorporated climate regulations into their business strategies and launched sustainability initiatives, their primary role has often been perceived as that of ‘policy takers’ rather than policymakers.

However, this perception has shifted, especially since 2015, when the United Nations introduced the Sustainable Development Goals (SDGs). Since then, there has been a growing recognition of the need for corporations to contribute to global climate efforts. The private sector, including multinational corporations, plays a strong role in global climate governance. Far from resisting change, these companies are often leading the way in implementing climate-conscious strategies and shaping climate policymaking across regions. Recognising and systematically integrating their contributions into policymaking processes could accelerate transnational climate governance, especially at a time when multilateral efforts are under strain.

A new debate in climate governance: the good, the bad, and the lobbying

When large multinational corporations do engage in policy advocacy, they are often seen as acting out of self-interest — for instance, by lobbying against climate-conscious regulations that might hinder profitability. This has led to widespread skepticism about such corporations’ commitment to sustainability.

At the same time, multinational corporations have made substantial contributions to global sustainability efforts, bringing their experience and practices across countries to engage with policymakers in the fight against climate change.  A compelling case study of this trend can be seen in China’s recent policy developments. In December 2024, China released the Sustainability Disclosure Standards for Business Enterprises – Basic Standard (Trial). This marks a significant step towards a unified national Environmental, Social and Governance (ESG) regulation in line with global frameworks. Interestingly, this Chinese standard adopts the double materiality principle — requiring companies to disclose both the financial risks posed by sustainability issues and their own impact on society and the environment — reflecting the influence of the European Corporate Sustainability Reporting Directive (CSRD).

This journey began with China’s growing recognition of the importance of the SDGs in global business and investment decisions. The regulation demonstrates China’s ambitions of aligning national-level policy with global standards, thereby promoting transparency and accountability. As the British Chamber of Commerce in Shanghai, one of the oldest foreign chambers operating in China, mentioned in a June 2024 event, this approach helps reduce the cost of preparing sustainability-related disclosures for companies subject to various disclosure regimes. The regulation also demonstrates that multinational corporations’ efforts and interests have been taken into consideration in Chinese policymaking.

How do climate policies travel globally?

How do climate policies travel globally — from Brussels to Beijing, for example? As members of the United Nations, both EU countries and China have committed to achieving net-zero emissions; the EU announced that it would achieve carbon neutrality by 2050, while China stated it would do so by 2060 via its national climate strategy ‘(otherwise known as ‘Dual Carbon Goals’). The willingness to act and implement climate action measures exists both in Europe and in China. While governments remain the ultimate decision-makers, multinational corporations contribute significantly to fostering ties between the EU and China. In an era of geopolitical fragmentation in which multilateral negotiations often stall, multinational corporations provide an alternative channel for transnational climate collaboration. They have not only implemented existing Chinese policies, but they have also initiated policy ideas, facilitated cross-border dialogues, and identified inefficiencies.

Clean energy is a key area of global climate governance, and building trust in renewable energy requires a stakeholder-driven approach that brings together governments, businesses, communities, and international organisations. Multinational corporations are playing a significant role in China’s clean energy transition. For example, since 2019 Airbus, with the support of the European Union Chamber of Commerce in China (EUCCC), has played a pivotal role in promoting corporate green energy procurement mechanisms in China. Additionally, Airbus is working closely with China to promote green, innovative, and sustainable development in the aviation industry by advancing the production and application of sustainable aviation fuel (SAF). Leveraging China’s abundant feedstock, strong policy support, and advanced energy technologies, Airbus is collaborating with key stakeholders — including airlines, airports, energy companies, and Chinese regulators — to scale up SAF adoption. Airbus views China as a long-term partner in aviation decarbonisation, and its efforts since 2019 demonstrate the corporation’s interest in aligning its global sustainability strategy with China’s ambitious green agenda.

Looking forward: considering multinational corporations’ contribution to policy

Although multinational corporations can contribute positively to global climate governance, the challenges they pose must not be overlooked by policymakers. One major concern is that companies may use their resources to influence regulations in their favour. Transnational climate policymaking should strike the right balance between acknowledging corporations’ efforts and safeguarding the public interest.

I argue that the contributions of multinational corporations to climate governance should be considered by policymakers around the world. Recognising multinational corporations as active contributors to climate governance — rather than passive market participants — is essential for designing effective climate policy. Ignoring their role would be a missed opportunity, as multinational corporations’ ability to operate across jurisdictions is not just a business advantage but also a potential strategic asset in the fight against climate change.

There are three key areas in which the contributions of multinational corporations could be integrated into policy decisions.

First, multinational corporations can help identify policy gaps. Because they operate across different counties with varying regulations, they are well-positioned to pinpoint inefficiencies and inconsistencies. For instance, in the case of Airbus’ operations in China, the company identified the lack of sustainable aviation fuel (SAF) as a barrier to aviation industrial decarbonisation — one of the critical areas for achieving China’s climate goals.

Second, multinational corporations can provide climate-related technical expertise. They are active innovators and knowledge sources in sector-specific clean technologies. For example, Ørsted’s experience in European offshore wind market design directly informed the development of policy frameworks in Taiwan and other emerging markets, helping create more investor-friendly regulatory environments.

Third, multinational corporations can facilitate stakeholder engagement by participating in policy discussions through industry groups, NGOs, and trade associations. Their involvement in multi-stakeholder dialogues could help to shape emerging regulatory frameworks that align industry objectives with broader policy goals, ultimately contributing to the long-term evolution of climate policy.

To maximise this positive impact, instead of viewing corporate lobbying as inherently problematic, policymakers should establish structured engagement channels for encouraging participation through business associations and multi-stakeholder platforms. While government leadership undoubtedly remains essential, leveraging policy initiatives driven by multinational corporations can accelerate regulatory innovation and enhance transnational climate governance.

Tags: Climate, Climate Change, climate action, multinational corporations