The role of short-termism and uncertainty in organizational inaction on climate change: multilevel framework

Despite increasing pressure to deal with climate change, firms have been slow to respond with effective action. This paper derives a multi-level framework for a better understanding of why many firms are failing to reduce their absolute greenhouse gas emissions that contribute to climate change. To explain the phenomenon of organizational inaction on climate change, we draw on the related concepts of short-termism and uncertainty avoidance from research in psychology, sociology and organization theory. We argue that antecedents related to short-termism and uncertainty avoidance reinforce each other at three levels - individual, organizational and institutional - and result in organizational inaction on climate change. We discuss the implications of our framework for research on corporate sustainability.