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This study draws a comparison between the Global Financial Crisis (GFC) and the COVID-19 pandemic crisis to assess the safehaven potential of Islamic stocks for G7 stock markets. We employ the cross-quantilogram framework of Han et al., which considers the non-linearity in the relationship, and thus captures the correlation between the Islamic and G7 stock markets across various quantiles reflecting different market conditions. The analysis also includes the time-varying cross-quantile correlation to observe the evolution of Islamic stocks' safe-haven potential. Our full sample analysis shows that Islamic stocks do not exhibit safe-haven properties for G7 stock markets. During the GFC period, Islamic stocks show some diversification benefits for the G7 stock markets. Notably, Islamic stocks emerged as a robust safe-haven asset for the G7 stock markets during the pandemic crisis. The study carries essential insights for equity investors and regulators of G7 and other countries to implement diversification/hedging strategies that would involve Islamic stocks to protect equity investments and the overall financial system amid the financial downturns.

Purpose The purpose of this research is to ascertain the impact of audit committee (AC) activism and independence on the quality and quantity of environmental, social and governance (ESG) disclosures for energy sector firms in Australia. This paper aims to understand how AC attributes such as meeting frequency, and the number of independent directors influence the compliance with the global reporting initiative (GRI) guidelines and quantity of ESG disclosures. Design/methodology/approach Bloomberg ESG disclosure scores and company reported AC attributes are collected and analysed using the pooled ordinary least square (OLS) regression framework with Petersen’s (2009) technique by using a two-dimensional cluster at the firm and year level. Further, this paper uses a lagged independent variable and two-stage least square approach to address endogeneity concerns. Findings The results show a significant positive effect of AC activism and independence on the level of compliance with the GRI guidelines, indicating the favourable effect of AC attributes on ESG reporting quality. Likewise, AC attributes positively affect the quantity of ESG disclosures. Notably, the impact of AC attributes is more pronounced on environmental disclosures. Originality/value This paper validates the significance of the management control mechanism in improving the quality and quantity of ESG disclosures for an environmentally sensitive sector, hence offering a potential answer to reduce agency and legitimacy issues for the sensitive industry firms.

Motivated by the growing attention on climate change and the ethical role that board characteristics and ownership may play in reducing greenhouse gas (GHG) emissions, this paper investigates the relationship between institutional ownership and GHG emissions. Using an extensive dataset from the UK and the USA, we show that institutional ownership is associated with less GHG emissions -a one standard deviation increase in the proportion of institutional ownership reduces carbon emissions by 1.02 metric tons. Our findings are robust when using alternative measures, econometric specifications and several approaches to address endogeneity. Further, we find no evidence for a stronger effect in the UK compared with the USA, as expected from our discussion of the governance contexts in the two countries. We also test the possible channel (i.e. exit and selection) through which institutional investors affect GHG emissions. In a set of additional analyses, we show that litigation risk and board gender diversity moderate the relationship between institutional ownership and GHG emissions. Finally, we also document a positive effect of the stewardship codes on the relationship between institutional ownership and GHG emissions. Our findings make significant theoretical and regulatory contributions.

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