Corporate governance and carbon emissions performance: International evidence on curvilinear relationships.

This study investigates the impact of corporate governance mechanisms (namely board meeting, board independence, board gender diversity, CEO duality, ESG-based compensation and ESG committee) on carbon emissions performance of multinational entities (MNEs). The study analysed international sample of 336 top MNEs operating in 42 non-financial industries from 32 countries over a 15-year period. Result shows that board gender diversity, CEO duality, and ESG committee are negatively associated with carbon emissions rate, whilst board independence and ESG-based compensation have significant positive impact. Whereas board gender diversity and CEO duality have significant negative impact on carbon emissions rate in carbon-intensive industries, the impact of board meeting, board independence and ESG-based compensation is significant and positive. In the non-carbon-intensive industries, board meeting, board gender diversity and CEO duality have significant negative impact on carbon emissions rate, whilst the impact of ESG-based compensation is positive. Further, there is a negative association between the millennium development goals (MDGs)/sustainable development goals (SDGs) era dichotomy and carbon emissions rate, implying that the United Nations agenda for sustainable development significantly affected carbon emissions performance of MNEs, with the SDGs era generally witnessing better carbon emissions management in comparison to the MDGs era in spite of the higher emissions level in the SDGs era. The study contributes to knowledge in several ways. First, it adds to the limited literature on the determinants of carbon emissions reduction within an international context. Second, the study addresses mixed result reported in prior studies. Third, the study adds to knowledge on the governance factors affecting carbon emissions performance in the MDGs and SDGs periods, thus providing evidence on progress MNEs are making towards addressing climate change challenges through carbon emissions management.
Competing Interests: Declaration of competing interest The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
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