Oppose, Support, or Hedge? Distributional Effects, Regulatory Pressure, and Business Strategy in Environmental Politics

Business matters in global environmental politics, as much research has demonstrated. Yet how firms engage with environmental politics varies within sectors, across sectors and institutional contexts, and over the course of the policy cycle. How can we explain the choice of corporate political strategy? To date, scholars have generated many case studies that highlight factors in the choice of political strategy in environmental politics. These explanatory factors relate in particular to material interests determined by firm-level variables and institutions at the national and international levels. 1 These studies tend to assess the relative significance of different variables in explaining strategic choice, but they do not advance propositions. Little systematic knowledge on the interaction of economic interests and social and political institutions in shaping corporate political strategy has been accumulated. This article takes a step toward theory-making on the strategic choice of firms in environmental politics. Building on recent theoretical advances on the formation of actor strategies in political economy, I argue that basic preferences of firms are translated into strategies in the context of institutional environments. 2 Based on this general model of strategy formation, I posit different sets of distributional effects and perceived regulatory pressure lead firms to adopt four ideal-type political strategies in environmental politics: oppositionfirms trying to veto a regulatory initiative; hedging-firms seeking to minimize compliance costs or level them across a global industry; support-firms aiming