The Power of Stakeholders: Driving—or Deterring—Local Government Environmental Policy

Source: How stakeholder influence shapes public sector environmental policy choice by Shirley-Ann Augustin-Behravesh, Nicole Darnall, Won No, and Stuart Bretschneider.

The urgency of environmental sustainability places public sector organizations at the center of global climate leadership. Governments account for about one-fifth of global GDP and contribute substantially to carbon emissions, giving them both the power and the responsibility to help achieve ambitious international targets, including a 45% reduction in emissions by 2030 and net-zero by 2050 (UNFCCC, 2018).

Local governments, however, vary widely in their approaches. Some pursue incremental initiatives that yield short-term efficiency gains, while others adopt comprehensive strategies aimed at the systemic transformations needed to achieve global climate goals. Our research shows that stakeholder influence is a critical factor shaping these choices.

The Dual Paths of Environmental Policy and the Forces That Shape Them

Local governments typically take one of two approaches to environmental policies. Comprehensive policies drive systemic change—such as net-zero mandates, renewable energy transitions, and stringent green building standards—while incremental policies focus on efficiency upgrades that deliver internal savings but limited long-term impact. These approaches exist along a continuum, with many cities starting small and gradually building toward broader change, as shown in the future below. However, to create the true transformative impact needed to meet our global sustainability goals, local governments need to adopt comprehensive environmental sustainability policies.

Progress along this continuum hinges on stakeholder influence. Policies reflect the push and pull of businesses, NGOs, agencies, and citizens, each with distinct priorities. To explain these dynamics, our study draws on Relational Models Theory (RMT), which clarifies how stakeholder relationships and norms drive cities toward either incremental measures or transformative strategies.

Which Stakeholder Relations?

We focus specifically on four types of stakeholder relations:

• Market-Pricing Relations: Driven by cost, efficiency, and returns (e.g., vendors, business lobbies).
• Authority-Ranking Relations: Rooted in hierarchy and power (e.g., federal or state agencies).
• Equality-Matching Relations: Based on reciprocity and collaboration (e.g., councils, city staff).
• Communal-Sharing Relations: Grounded in moral obligation and collective identity (e.g., advocacy groups, nonprofits).

What the Study Shows

Drawing on surveys of directors of environmental and sustainability managers in 200 U.S. cities and extensive archival data, the study reveals four distinct patterns, which are summarized below and in the following figure:

• Market-Pricing Stakeholders: Resist comprehensive environmental sustainability policies (cities were 44.4% less likely to enact greenhouse gas emissions policies and 53% less likely to join climate pledges) but had little effect on incremental efforts.
• Authority-Ranking Stakeholders: Also deterred comprehensive action (41.6% less likely), while showing little effect on incremental policies.
• Equality-Matching Stakeholders: Strongly encouraged comprehensive environmental sustainability policies (cities were 194.4% more likely to adopt ambitious goals), with less influence on incremental efforts.
• Communal-Sharing Stakeholders: Consistently supportive, increasing the likelihood of both comprehensive (up to 220.5%) and incremental policies, though their greatest impact lay in driving systemic change.

Practical Strategies for Public Officials

To achieve meaningful sustainability outcomes, local governments should:

1. Leverage supportive stakeholders by creating inclusive sustainability committees, advisory boards, and co-design processes that engage equality-matching and communal-sharing stakeholders. 
2. Address resistance proactively. When confronted with resistance from market-pricing stakeholders, local governments might leverage incentives such as subsidies, grants, or tax credits to align financial interests with environmental goals. Friction from authority-ranking stakeholders can be met with deliberate negotiation and sustained dialogue to better align priorities across government levels.

Conclusion: Stakeholder Dynamics as the Missing Link

Not all stakeholder influences are equal. Comprehensive, transformative environmental sustainability policies depend on cultivating strong relationships with equality-minded internal actors and advocacy-driven community groups, while resistance from market-focused and hierarchical stakeholders must be managed through incentives and negotiation.

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