Linkage between corporate carbon performance, CEO duality and financial performance: evidence from Indian listed firms

This study explores the relationship between carbon performance (CP) and financial performance (FP) in Indian firms, with a further examination of the moderating role of CEO duality. Using data from 130 listed non-financial firms in the BSE500 index from fiscal year ending 2016 to 2022, the study employs the system generalized method of moments (SGMM) model based on information from annual reports, sustainability reports and the Ace Equity Database. Here, CP is proxied by carbon intensity (CI), suggesting that higher CI is associated with lower CP. The findings reveal that a unit increase in CP leads to an increase of 0.002 units in ROA and a decrease of 0.001 units in MBR. Furthermore, the positive moderating role of CEO duality between CP and ROA is established, whereas CEO duality is found to have an adverse moderating role between CP and MBR. Given the limited number of empirical studies on this subject in the Indian context, this study contributes to the literature by highlighting the heterogeneous influence of carbon management on accounting and market-based firm performance (FP). These insights offer practical guidance for corporate managers aiming to align sustainability initiatives with financial decision-making.