ABSTRACT Corporate social responsibility (CSR) governance systems played a crucial role in ensuring corporate accountability and facilitating decision‐making that fostered trust and transparency among stakeholders. By embedding sustainability into strategic processes, these systems promoted environmental innovation and reinforced long‐term ecological responsibility and value creation. However, significant knowledge gaps remained regarding the extent to which CSR governance systems influenced environmental innovation. This study addressed these gaps by drawing on the natural‐resource‐based view (NRBV) theory and analyzing data from 267 nonfinancial firms listed on the London Stock Exchange between 2007 and 2024, sourced from the Bloomberg Database. The empirical analysis employed robust econometric techniques, including feasible generalized least squares (FGLS), Driscoll–Kraay standard errors with fixed effects, and a two‐step generalized method of moments (GMM) approach. Findings revealed that CSR governance mechanisms—specifically board gender diversity, the size of the CSR committee, the presence of nonexecutive directors on CSR committees, and the frequency of CSR committee meetings—exerted a significant and positive impact on environmental innovation. The study recommended that corporations institutionalize CSR governance frameworks, particularly through dedicated committees and specialized board structures, to embed sustainability into corporate strategy. Doing so enhanced competitiveness, strengthened reputation, and generated long‐term stakeholder value.
Mensah et al. (Wed,) studied this question.
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