<p>This study investigates how national climate policy instruments interact with financial constraints to shape corporate decarbonization, using data on 12,749 domestic and multinational firms across 51 countries from 2005 to 2022. We show that regulatory enforcement and carbon pricing reduce emissions even when firms face capital scarcity, while targeted subsidies have no measurable effect. The impact of regulation depends on institutional context: ESG disclosure requirements and supportive informal norms such as social trust, individualism, and competitiveness amplify effectiveness, whereas strong shareholder rights or uncertainty-averse cultures substitute for regulation and diminish its marginal role. We also uncover ethical risks in global production. Financially constrained multinationals often reallocate emissions to affiliates in weaker jurisdictions rather than invest in abatement, undermining collective climate goals, while firms subject to stringent regulation gain privileged access to global capital, disadvantaging peers in laxer regimes. By integrating institutional theory with business ethics, our findings show that climate accountability is not only a matter of environmental effectiveness but also of justice and fairness. Well-designed and well-enforced policies, aligned with institutional contexts and coordinated internationally, are essential for ensuring that the burdens and benefits of decarbonization are equitably distributed.</p>