When pursuing the global sustainability strategy, multinational enterprises (MNEs) are embedded in the sustainability-specific organizational field where global sustainability standards create strong institutional forces to shape MNEs’ sustainability behaviors. The purpose of our paper is to elaborate on the conditions under which MNEs are more likely to resort to decoupling as the strategic response to institutional complexity in the organizational field of global sustainability reporting. By conceptualizing the coexistence of multiple sustainability reporting standards from the lens of institutional complexity, our paper theorizes how field-level attributes – fragmentation, formalization, and centralization – shape MNEs’ strategic response. We argue that the current fragmented and informalized disclosure standards are more likely to trigger policy-practice and means-ends decoupling, in the form of either symbolic adoption or symbolic implementation. The recent harmonization efforts, such as the emergence of the International Sustainability Standards Board (ISSB) and its publication of International Financial Reporting Standards (IFRS) S1&S2, could enhance the centralization of global sustainability reporting and provide hope to achieve higher levels of compliance in reporting. Overall, with the collective efforts of all actors in the organizational field of global sustainability reporting, a positive feedback loop could be formed to achieve an alignment of transparency policy, consistent reporting practice, and the intended objective of sustainable development.
