How Firms Construct Climate Identities in New Zealand: Resolving the Tensions Between Economic Imperatives and Climate Goals

ABSTRACT Drawing on legitimacy theory, the aim of this study is to answer the research question: ‘How does corporate climate identity construction enable firms to make legitimacy claims while managing tensions between the economic imperatives and climate goals?’ The research design relies on a discourse analysis of 252 corporate reports published between 2012 and 2021 from 50 firms listed on the New Zealand Stock Exchange. This is coupled with 35 semi‐structured interviews with representatives from 28 firms in the sample. The findings suggest that firms largely adopt climate targets as a tool of legitimacy rather than to substantively decarbonise their operations. Committing to the targets allows firms to construct narratives that position them as climate leaders and as responsible, transparent entities that are compliant with emerging regulatory norms. These identities also allow them to claim discursive, technical, and relational forms of legitimacy even when the changes to their business models are not particularly meaningful. This study contributes to the literature on corporate climate governance by providing insights into the processes through which climate identities are constructed. The research also shows how firms leverage these identities to appease stakeholder expectations that the firm is doing something about climate change while still meeting their mandate to perform financially.