Podcast Summary: New Books Network – Lily Hsueh, Corporations at Climate Crossroads: Multilevel Governance, Public Policy, and Global Climate Action (MIT Press, 2025)
Release Date: October 17, 2025
Host: Michael Simpson
Guest: Lily Hsueh (Associate Professor, Economics & Public Policy, Arizona State University)
Overview
In this episode, host Michael Simpson discusses Lily Hsueh’s new book, Corporations at Climate Crossroads, which examines the evolving responsibilities, pressures, and roles that corporations face in global climate governance. Hsueh explains how multilevel governance shapes corporate environmental behavior, the changing landscape of climate disclosure, the agency of managers, and the interplay between global, national, and subnational policies on climate action. The conversation highlights practical, empirical insights and considers both structural and human factors influencing corporate responses to the climate crisis.
Key Discussion Points & Insights
Genesis of the Book and Personal Motivation
[03:40–06:25]
- Lily Hsueh shares that her upbringing in Silicon Valley exposed her early to corporate environmentalism, especially on issues like toxic waste and groundwater contamination, and the interplay of markets, regulation, NGOs, and public awareness.
- Her professional journey, from junior economist at the Federal Reserve to public policy academia, reflects her desire to bridge economics and politics in understanding corporate environmental behavior.
“It was beyond just economic forces and market forces … it was about economics, market forces, and also about politics and regulation and global governance.”
— Lily Hsueh [04:46]
Defining Corporate Environmentalism and Self-Regulation
[06:25–07:32]
- Hsueh frames corporate responsibility and sustainability as firms’ proactive actions—such as adopting emissions targets, internal carbon pricing, renewable energy investments, and community initiatives—not just compliance.
- These actions signal a broader concept of “corporate self-regulation” in advancing climate mitigation.
“I’m really talking about proactive actions and activities that firms are taking… companies may on their own proactively adopt a quantitative emissions target or setting an internal price on carbon.”
— Lily Hsueh [06:41]
The Carbon Disclosure Project (CDP) and Scope of Emissions
[07:32–09:36]
- CDP (formerly Carbon Disclosure Project) is a voluntary reporting system for corporate climate performance, supported by investors representing about $90 trillion in assets.
- Hsueh explains “scopes” of emissions:
- Scope 1: Direct, owned/controlled sources (e.g. company vehicles).
- Scope 2: Indirect, from purchases like electricity.
- Scope 3: Supply chain and downstream indirect emissions.
Voluntary Ratings: Strengths & Shortcomings
[09:36–12:05]
- CDP uses a letter-grade system to assess disclosure efforts, not actual environmental performance.
- Hsueh distinguishes between “sustainability outputs” (reporting, transparency) and “outcomes” (actual emissions reductions).
- CDP’s primary value: preparing companies for increasingly mandatory disclosure requirements, especially as nations enact their own climate reporting standards.
“This grading however does not equate to environmental performance… [it] is about sustainability outputs rather than outcomes.”
— Lily Hsueh [10:26]
Who Uses Ratings & Why They Matter
[12:05–13:19]
- Institutional investors are a chief audience, focusing on long-term climate risk as it affects company value and retirement assets.
- CDP disclosures are critical for “market impacts” that may emerge over decades.
Regulation vs. Innovation: The Role of Policy
[13:19–15:39]
- Regulations internalize environmental and social costs but also drive innovation by forcing companies to adapt and evolve.
- Hsueh argues that corporations respond both to “private politics” (activist/consumer demands) and “public politics” (laws/regulation), often acting in anticipation of both.
- Managerial agency emerges as a powerful driver of corporate change alongside institutional structures.
“Companies will preempt regulation and activists’ demands and act … what I bring to bear [in the book] is not just regulation, but managerial agency.”
— Lily Hsueh [14:10]
Managerial Agency: Structure Meets Agency
[15:39–18:18]
- Managers are key to shaping a corporation’s climate trajectory.
- Hsueh identifies three core managerial tasks:
- Attracting climate-conscious employees.
- Forming internal coalitions, including boards and executive-level leadership.
- Shaping vision, identity, and incentives to align firm behavior with sustainability goals.
“They are carriers of identity and reputation … able to assess what are the complementary capabilities inside the firms … both acting as rational representatives and as vision setters.”
— Lily Hsueh [17:20]
Consumers as Disruptors
[19:45–21:16]
- Consumers play a dual role as employees and as purchasers, able to drive companies toward sustainable practices by choosing what to buy and where to work.
- Market power, when harnessed, can pressure companies to prioritize sustainability.
“Consumers also have that market power and especially if it can be harnessed for sustainability purposes.”
— Lily Hsueh [20:52]
Corporate Response to Global Climate Policy (Paris Accords, US Policy Reversals)
[21:16–24:17]
- After the US exit from the Paris Accords in 2017, many corporate leaders publicly supported the agreement due to:
- Ongoing, profitable investments in clean tech.
- The importance of global cooperation for future business.
- Reputational gains associated with climate leadership.
- Some companies (e.g., Ford, ExxonMobil) have demonstrated “greenwashing”—public declarations not always matched by operational or advocacy choices, especially relating to regulatory rollbacks.
- Nonetheless, Hsueh notes a trend toward increased clean tech investment and continued multilevel regulatory pressures.
“It is good publicity and reputational publicity to come out in support of the Paris Agreement.”
— Lily Hsueh [22:43]
“Oil and gas companies… continued to invest in new oil and gas developments, yet they are also committing to net zero emissions goals.”
— Lily Hsueh [24:22]
Globalization: Asset or Hindrance for Corporate Climate Action?
[27:11–28:48]
- Transnational corporations are responsible for the majority (about 70%) of industrial emissions; their participation is essential.
- The solution must be both global (given the reach and supply chains) and local (responsive to policy diversity and innovation at subnational levels).
Multilevel Governance: Global, National, Subnational Action
[28:48–30:39]
- Effective climate action requires coordination between local, state, federal, and global institutions.
- When national-level policy lags, states (e.g., California) and municipalities can drive progress, serving as “policy laboratories.”
Global North/South Dynamics and Supply Chain Responsibility
[30:39–33:43]
- Corporate mitigation activities differ between the Global North and Global South due to regulatory disparities.
- Global corporations have increasing opportunities—and responsibilities—to drive sustainable land use and emission reductions across international supply chains, particularly by partnering with local suppliers and emphasizing climate equity.
“…it is even more important that global businesses… are exercising their corporate citizenship and authority…”
— Lily Hsueh [31:37]
Role of Global Institutions (World Bank, IMF, WTO)
[33:43–34:51]
- These organizations are actively involved, but more coordinated action, especially around carbon pricing and trading mechanisms, is needed to facilitate a global shift toward Paris Agreement targets.
The Global Sustainable Business and Climate Action Database
[34:51–36:26]
- Hsueh has developed a proprietary database encompassing firm, market, sector, and country-level climate action metrics.
- Tracks financials, emissions disclosures, internal carbon pricing, ESG (Environmental, Social, Governance) metrics, managerial structure, and participation in global governance initiatives.
- Useful for both research and policy analysis.
Notable Quotes
- “These [ratings] are about sustainability outputs rather than outcomes.” — Lily Hsueh [10:26]
- “They [managers] are carriers of identity and reputation…” — Lily Hsueh [17:20]
- “Consumers also have that market power and especially if it can be harnessed for sustainability purposes.” — Lily Hsueh [20:52]
- “Several things are going on in today’s world. Oil and gas companies… will continue as business as usual, as well as continue to commit to net zero emission goals in their operations chiefly. So scope three is still a question mark. And invest in clean tech.” — Lily Hsueh [26:09]
- “It is even more important, if you will, that global businesses who operate globally… are exercising their corporate citizenship and authority.” — Lily Hsueh [31:37]
Timestamps for Key Segments
- Introduction & Motivation: 03:31–06:25
- Defining Corporate Environmentalism: 06:25–07:32
- CDP & Emissions Scopes: 07:32–09:36
- Strengths/Shortfalls of CDP: 09:36–12:05
- Investors & Rating Utility: 12:05–13:19
- Regulation, Innovation & Agency: 13:19–15:39
- Managerial Agency Explained: 15:39–18:18
- Consumers as Disruptors: 19:45–21:16
- Corporate Response to Policy: 21:16–24:17
- Greenwashing & Political Headwinds: 24:17–27:11
- Globalization & Supply Chains: 27:11–28:48
- Local vs. Global Solutions: 28:48–30:39
- Global North/South, Supply Chains: 30:39–33:43
- Role of Global Institutions: 33:43–34:51
- The GSBCAD Database: 34:51–36:26
Summary Takeaway
Corporations at Climate Crossroads frames corporate climate action as a deeply complex, multilevel process shaped by an interlocking web of markets, policies, management choices, and societal expectations. Lily Hsueh’s work highlights the critical importance of structural pressures and human agency—especially managerial leadership—in shaping effective, authentic corporate responses to the climate crisis. She calls for greater transparency, accountability, and collaboration across public and private sectors, reinforced by robust data and informed by both global coordination and local initiative.