Abstract

As climate change continues to be a pressing issue affecting businesses, firms are taking proactive measures by integrating carbon considerations into their overall strategic planning for environmental sustainability. Nonetheless, the question of whether it pays to be green remains inconclusively answered. Based on an analysis of the 200 largest public listed firms by market capitalisation in Malaysia, the findings indicated that most of the firms are still reactive in managing their carbon activities; however, corporate carbon strategy does, indeed, lead to better financial performance. The findings reaffirmed that going green pays off, particularly for firms with higher levels of foreign ownership. Interestingly, an inverse relationship was observed among firms with higher levels of government shareholdings. Additionally, the firms have been categorised into six different groups based on their scope and level of corporate carbon strategies, ranging from “wait-and-see” to “all-round explorer” classifications. Taken together, these findings enrich corporate carbon and sustainability literature and offer insights into theoretical and policy implications, along with suggestions for future research.