Multinational enterprises (MNEs) are uniquely positioned to address Grand Challenges relating to sustainability due to their resources and capabilities as well as their reach along global supply chains. To shed new light on the MNE-sustainability nexus, we turn to literature on transnational social spaces and transnational communities to investigate how these concepts can be applied to the MNE in the context of managing sustainability. Empirically, we undertook a qualitative study of one European MNE and two of its agri-food supply chains. We find the MNE’s transnational space to be shaped by a number of structural features, including cross-cutting committees, a linchpin function of middle managers and a hybrid approach that embeds both the business case and the societal case for addressing Grand Challenges. Theoretically, we contribute by identifying a new type of transnational community within the MNE which we term issue-based transnational community. Compared to existing operationalizations, like managerial and ownership-based transnational communities, the issue-based type is relatively more open, operates on the basis of expertise and the direction of relationships is contingent upon the issue around which the community is formed.

Table 1: Global level changes

Scenario 1

10x increase in global CLT market

Scenario 2

15x increase in global CLT market

Scenario 3

20x increase in global CLT market

Global carbon emissions

+ 0.0065 MT (from the baseline of 32.931 GT). Negligible change.

+0.010 MT (from the baseline of 32.931 GT). Negligible change.

+0.132 MT (from the baseline of 32.931 GT). Negligible change.

Global GDP

-0.0008 %

-0.0012%

-0.0162 %

Global exports

-0.0005 %

-0.0008 %

-0.0011 %

Global employment

-0.00199 %

-0.002985 %

-0.00398 %

Global investments

-0.00634 %

-0.00951 %

-0.02536 %

Table 2: National level changes

Scenario 1

10x increase in global CLT market

Scenario 2

15x increase in global CLT market

Scenario 3

20x increase in global CLT market

US carbon emissions

- 0.00009 MT (from the baseline of 4.9556 GT). Negligible change.

-0.007 MT (from the baseline of 4.9556 GT). Negligible change.

-0.00919 MT (from the baseline of 4.9556 GT). Negligible change.

US GDP

-0.0002 %

-0.0003 %

- 0.0004 %

US exports

-0.0005 %

-0.0008 %

-0.0040 %

US imports

-0.001 %

-0.0015 %

-0.002 %

US employment

-0.00001 %

-0.000016 %

-0.000019 %

US investments

- 0.00028 %

- 0.00042 %

-0.00112 %

Companies with inherently unsustainable business models face a strategic sustainability paradox, as unsustainability is ingrained into the core of their business models and cannot be 'fixed'. This creates an inherent paradox for the sustainability communication of such companies, as they need to find a balance between addressing societal sustainability expectations and reporting on their unsustainable practices. This study focuses on fast fashion as an inherently unsustainable business model with H&M as a case study. We use paradox as a meta-theory and employ legitimation as our theoretical lens to examine how an inherently unsustainable company constructs itself as a desirable and appropriate organization. Our findings propose a model of traditional and paradoxical legitimation strategies, which are grounded in authority, morality, and rationality as sources of legitimation. These strategies enable unsustainable companies to 'perform' the sustainability paradox by simultaneously claiming sustainability and defending their unsustainability.

With the exponential growth of sustainable financial instruments (SFIs), this study explores whether such issuances act as costly, observable signals of a firm's commitment to sustainability, thereby improving corporate reputation and differentiating it from reputational risk. Additionally, we examine whether the cost of these signals—whether through potential reputation loss or direct financial costs—reinforces their effect based on a firm’s sustainability performance and debt cost. Using a sample of 500 firms from Fortune's World's Most Admired Companies between 2017 and 2023, our findings confirm that SFIs serve as signals that enhance corporate reputation while mitigating reputational risk. However, this improvement is not uniform. Specifically, a firm’s previous sustainability performance amplifies the positive impact of SFIs on both corporate reputation and reputational risk, while debt cost intensifies only the effect on corporate reputation. This study contributes to the corporate sustainability literature by clarifying the reputational effects of SFIs and enriches signaling theory by illustrating the nuanced role of signaling costs in corporate reputation and risk management.

Combining research on organizational misconduct and strategic legitimacy management, this study argues that the perceived legitimacy loss following environmental regulatory sanctions drives firms to engage in action-oriented sustainability initiatives as a tool for legitimacy recovery. We develop a nuanced theory of how environmental regulatory sanctions influence firm responses by distinguishing between (a) whether the sanction was issued by the regulatory headquarters and (b) the proximity of the sanction to the firm’s headquarters. Furthermore, we explore how regulatory environmental sanctions may have differential perceived legitimacy loss depending on a firm’s dependence on regulatory bodies and its reputation with primary stakeholders. Using a panel of Fortune 500 firms’ participation in green power practice, we find support for most of our hypotheses. Our study provides a comprehensive understanding of how, based on various contingent factors, environmental regulatory sanctions can result in varying degrees of perceived legitimacy loss, thereby influencing corporate sustainability practices.