Green innovation and CO2 emissions in G7 countries: the moderating role of corporate governance

Purpose This work aims to investigate how green innovation influences CO2 emissions in the Group of Seven (G7) countries and explore the moderating role of corporate governance (CG) in this relationship. Design/methodology/approach Using data from 503 firms from G7 countries collected from the LSEG ESG database, previously branded as Refinitiv ESG and originally as Thomson Reuters ASSET4, between 2010 and 2023, the authors used a multivariate linear regression analysis to test the effect of green innovation on CO2 emissions and estimate the moderating effect of CG between them. Findings The regression results indicate that green innovation is negatively related to CO2 emissions and accentuates CO2 emissions reduction with the moderating effect of CG. Originality/value Although prior literature studied the direct correlation between green innovation and CO2 emissions, this research work focused on examining the direct association between green innovation and CO2 emissions using the moderator effect of CG, which has not been widely used in studies of green innovation yet. Moreover, to the best of the authors’ knowledge, this is the first study to investigate the moderating effect of CG in the context of green innovation and CO2 emissions for companies belonging to G7 countries.