The relationship between corporate governance mechanisms and carbon emissions performance in advanced and emerging economies

This study investigates how corporate governance attributes shape firms’ carbon emissions performance, with the aim of identifying internal governance mechanisms that support effective carbon management and highlighting governance gaps that may impede such performance. The study uses a balanced panel of 972 listed non-financial firms from the world’s five largest economies—the United States, China, Germany, Japan, and India- over the period 2020–2024. The analysis utilises multiple econometric approaches, including fixed effects models with Driscoll–Kraay standard errors, Pooled Ordinary Least Squares (POLS) with Driscoll–Kraay standard errors and industry, year and country dummies, and 2 SLS estimation to address potential endogeneity. Our results indicate that boards characterised by greater gender diversity and independence, and that meet more frequently are associated with lower carbon emissions intensity and improved carbon emissions performance. CEO non-duality is also associated with improved carbon emissions performance. However, board size does not appear to improve such performance. This study provides novel cross-country evidence on the governance–carbon emissions association using firm-level data from five major economies. It advances the literature by offering robust insights into how board structures influence corporate carbon mitigation within an international institutional setting.