The aim of this study is to investigate the relationship between corporate emission reduction policies (ERPs), greenhouse gas (GHG) emissions, and the moderating role of corporate governance. Using a dataset of 18,559 firm-year observations from 28 developed and emerging countries from (Mollick, and Haidar, 2011) and 2022, the study finds that for firms with stronger corporate governance, higher ERPs are associated with more substantive emission intensity reductions. Findings remain robust across multiple specifications. Firm-level trend regression confirms that if a firm’s ERPs improve over time compared to the sector average, emission intensity decreases. Results underscore the importance of strong corporate governance in mitigating greenwashing risks and ensuring the credibility of corporate climate commitments. The study contributes to the growing literature on climate governance, and corporate environmental strategy by highlighting the interplay between corporate governance and ERPs in achieving emission intensity reductions. Research avenues, limitations, and recommendations are presented, emphasizing specifically the need for investors and regulators to not only focus on the level of ERP adoption, but scrutinize governance structures that determine ERP effectiveness in practice.
Michael König-Sykorova (Thu,) studied this question.