This paper examines the evolving role of cities and multinational enterprises (MNEs) in global sustainability, emphasizing the dual perspectives of "city-as-unit-of-analysis" and "city-as-actor." Traditionally viewed as passive contexts in international business (IB) research, cities are reframed as active agents shaping sustainability agendas. Highlighting tensions in city-MNE dynamics, including misaligned incentives and the “tragedy of the commons,” the paper emphasizes innovative governance solutions and co-evolutionary partnerships. Using Finnish cities Lahti and Kokkola as examples, it showcases strategies for reducing carbon footprints in cities and enhancing global value chain decarbonization, called carbon handprint. The study advances IB research by integrating city-focused approaches into global sustainability frameworks and provides directions for future research on the interplay between MNEs and cities.
