Institutional theory has overlooked the implications of organizational responses to societal demands. We investigate how three conventional corporate responses to the demand for climate change action, including compromise, avoidance, and manipulation, relate to actual emissions reduction. We also examine the moderating effect of reputational risk on these relationships. Our analysis is founded on panel data regression of 5,431 firm-year observations of S&P500 companies between 2011 and 2021. Our results show that compromising is associated with a reduction in emissions over time. We find marginal evidence that avoiders increase emissions and that, under high reputational risk, organizations manipulate more and consequently increase their emissions. Our study contributes to institutional theory by connecting organizational responses to societal expectations with environmental performance. Our findings vindicate the promise of corporate sustainability strategies in reducing carbon emissions.
