Exploring the relationship between managerial tenure, environmental performance, and carbon emission costs in Middle Eastern energy firms

The association between environmental performance and carbon emissions by publicly trafficked energy firms in the Middle East resembles two questions that it addresses: does better environmental performance lead to lower production levels or emissions rates and to what level is managerial tenure a mediating factor in that relationship. The study is based on a panel dataset of 921 firm-year observations covering the 2013–2024 period and employs High-Dimensional Fixed Effects in addition to dynamic GMM models for small sample data while controlling heterogeneity, endogeneity, and clustering with mixed-effects models. The results suggest that better environmental performance leads to significantly lower carbon emissions, thus supporting the impact of sustainability projects. In addition, managerial tenure has a positive but small moderating effect: experienced managers increase the effectiveness of environmental strategies while not reducing emissions by themselves. Investment in renewables and firm size lead to lower emissions while dependence on fossil fuel and energy intensity result in higher emissions. The findings, overall, have significant implications for aligning managerial capabilities with sustainability strategies.