This paper contributes to the extant business strategy and sustainable development literature by investigating the effect of a broad corporate governance disclosure index on executive compensation and, subsequently, determines the extent to which the pay‐for‐sustainability sensitivity is moderated by corporate governance mechanisms. Employing data collected from 16 Sub‐Saharan Africa countries over the period from 2007 to 2018, the findings are as follows: First, we report that better‐governed banks pay lower compensation packages to their executives. Second, we find that executive compensation increases sustainable banking disclosures in the countries. Third, the findings show that executive compensation is negatively associated with environmental performance. Finally, we detect that the association between executive pay and sustainable banking performance is significantly moderated by corporate governance mechanisms, revealing that the pay‐for‐sustainability sensitivity is mainly positive and improves in banks with high corporate governance quality. This implies that the pay‐for‐sustainability sensitivity is contingent on the quality of the bank's internal governance mechanisms. Our findings have key implications for banking practitioners, regulators, environmental activists, and policy‐makers.

This paper contributes to the sustainable development in business literature by examining the impact of a broad corporate governance disclosure index on sustainable banking initiatives and, subsequently, determines the extent to which the sustainability-for-performance sensitivity metric is moderated by corporate governance mechanisms. Based on data collected from 220 banks in 16 Sub-Saharan Africa countries over the 2007-2018 period (i.e., making over 2027 bank-year observations), the findings of the study are as follows: Firstly, the study finds that corporate governance mechanisms have positive impact on sustainable decisions, as captured by environmental disclosures and sustainable banking initiatives. Secondly, the study finds that sustainable banking initiatives improve the financial performance of banks in the Sub-Saharan African countries. Finally, the study detects that the relationship between sustainable banking initiatives and financial performance is significantly moderated by corporate governance mechanisms, revealing that the sustainabilityfor-performance sensitivity metric is mainly positive, and improves in banks with quality corporate governance mechanisms. This indicates that the sustainability-forperformance sensitivity is contingent on the quality of the bank's corporate governance structures. The findings have key implications for banking practitioners, environmental activists, regulators and policymakers.

This study seeks to contribute to the extant business strategy and the environment literature by investigating the effect of CEO pay and executive compensation (EC) on sustainable business practice (SBPs). It also distinctively ascertains whether the payfor-sustainability sensitivity (PSS) is reinforced in firms with sustainability-based compensation (SBC) policy. Using a sample of 262 UK listed firms from 2009 to 2018, our findings are threefold. First, the findings reveal that both CEO pay and EC variables have positive effect on all SBP measures, except CO 2 reduction performance where the link is negative. Second, the study shows that the PSS is reinforced for firms that implement SBC policy. Finally, we detect that both the PSS and the moderation effect of SBC on the PSS are higher in the symbolic construct of SBPs than the actual measures. The results support insights drawn from neo-institutional theory. The findings have key implications for regulators and policy makers.

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We investigate the interrelationships among carbon performance, CEO Pay, executive compensation, financial performance and market value. Using data relating to non-financial firms from UK FTSE 350 from 2009 to 2018, our findings are fourfold.First, our results suggest that actual carbon performance is negatively associated with financial performance and market value of firms. Second, we document that selfreported carbon performance has no effect on financial performance. By contrast, we observe that self-reported carbon reduction initiatives performance has positive impact on market value. Third, our results suggest that CEO Pay, and executive compensation have positive moderating effect on the association between self-reported carbon performance and financial performance. In addition, we show that selfreported carbon performance-market value nexus is positively moderated by CEO Pay and executive compensation. Fourth, we observe that CEO Pay, and executive compensation have no moderating impact on actual carbon performance-market value nexus. Our findings demonstrate that while firms appear to employ compensation incentives to symbolically enhance their self-reported carbon performance, this does not result in actual carbon emission reduction. Our findings have key implications for policymakers.

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