Multinational Corporations and Climate Change: Four Environmental Strategies and Their Impacts on Firm Performance

ABSTRACT While existing research has examined various factors influencing the ESG–firm performance relationship, firm strategy‐related factors remain underexplored. To address this gap, this study introduces two key strategic factors: (1) firm motivation and (2) the relevance of ESG to core business operations. Additionally, we develop a conceptual framework that classifies four environmental response strategies and examines their differential impacts on firm performance. Through a case study of Walmart since the early 2000s, we find that the shift toward active environmental strategies was driven more by reputational and financial challenges than by ethical considerations. Furthermore, Walmart's enhanced integration of environmental initiatives in response to climate challenges reflects a dual objective: sustaining long‐term firm growth while mitigating the rising costs of regulatory compliance. This paper complements previous studies on MNCs' environmental engagement by proposing opportunities for creating advantages, rather than viewing it solely as additional costs.