Low‐Carbon Energy Transition and Corporate Carbon Emissions: The Critical Role of Climate Change Mitigation Policies and Institutional Context

Abbasi, Bilal; Khan, Mushtaq Hussain; Gul, Ambreen; Haq, Inam Ul; Azeem, Muhammad Umer

Low‐Carbon Energy Transition and Corporate Carbon Emissions: The Critical Role of Climate Change Mitigation Policies and Institutional Context

Abbasi, Bilal ORCID: https://orcid.org/0000-0003-2263-7208, Khan, Mushtaq Hussain, Gul, Ambreen ORCID: https://orcid.org/0000-0003-4676-0323, Haq, Inam Ul and Azeem, Muhammad Umer ORCID: https://orcid.org/0000-0002-1649-8099 (2026) Low‐Carbon Energy Transition and Corporate Carbon Emissions: The Critical Role of Climate Change Mitigation Policies and Institutional Context. Business Strategy and the Environment.

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Official URL: https://doi.org/10.1002/bse.70894

Abstract

This study examines the strategic efficacy of corporate low‐carbon energy transition, such as through nuclear energy adoption, as a response to decarbonization pressures. Analyzing an international sample of energy firms, we demonstrate that the relationship between this form of transition and emission reductions is not technologically determined but institutionally channeled. Our analysis reveals that the contribution of a low‐carbon transition strategy to corporate decarbonization is significant only when embedded within a robust institutional framework characterized by stringent climate policies and a strong rule of law. The empirical evidence further highlights a fundamental divergence in outcomes between pronuclear and antinuclear regulatory environments, particularly within the context of the EU's sustainable finance taxonomy. These findings compel a strategic reappraisal. For corporate leaders, pursuing a low‐carbon transition via contested technologies represents not merely an engineering choice but a sophisticated legitimacy‐management instrument whose success is contingent on institutional context. For policymakers, our results underscore that realizing the decarbonization potential of such transitions requires deliberate institutional architecture rather than mere technological adoption.