Climate change and the associated issue of curbing carbon emissions have risen on the agenda of policymakers worldwide. However, global coordination on matters such as harmonized regulation has been subject to signifcant political frictions, and the large intergovernmental transfers needed to fnance the transition of developing economies have proven hard to raise. Recently, there have been considerable responses to climate change from the private sector, with stakeholders placing more pressure on frms, and fnancial markets mobilizing increasingly more capital towards the reduction of negative externalities. We argue that although multinational enterprises (MNEs) have been a major contributor to the problem, they can be an important part of the solution - they have unique features that enable them to play an important role in the fght against climate change. MNEs have extensive and efcient internal markets for governance, fnancing, and technology, which enable them to circumvent country-specifc frictions to climate action such as heterogeneous regulation, corruption, and the lack of technology. We analyze how diferent public and private incentive mechanisms could be designed to leverage MNEs' unique features, realign their incentives, and engage their potential to play a role in decarbonizing the economy. Lastly, we discuss challenges, opportunities, and future research.