Business environmental innovation and CO₂ emissions: The moderating role of environmental governance

Abstract

This paper examines the effects of environmental innovation on CO 2 emissions as well as the moderating role of environmental governance in this relationship. Based on a sample of companies listed on the London Stock Exchange for the period from 2016 to 2020, the findings show that environmental innovation reduces CO 2 emissions including Scope 1 and Scope 2 CO 2 emissions. Likewise, our findings are associative of a moderating effect of environmental governance on the environmental innovation-CO 2 emissions nexus. We argue that environmental innovation along with better environmental governance leads to a reduction in CO 2 emissions. Our results hold for subsamples of firms with a strong/low environmental governance and ESG performance. Our findings offer important implications for companies and policymakers towards adopting more environmental technologies along with enhancing environmental governance to reduce CO 2 emissions.

Green innovation, globalization, financial development, and CO2 emissions: the role of governance as a moderator in South Asian countries

“…The implementation of strong governance practices also considerably and favorably affects the financial performances of industrial enterprises (Braune, Sahut, and Teulon 2020). Albitar et al, (2022) looked at how environmental innovation affects CO2 emissions as well as how environmental governance affects this relationship in a moderating way. According to their research, which was grounded on a sample of firms that were registered on the London Stock Exchange between 2016 and 2020, environmental innovation lowers CO2 emissions.…”

“…This may have an impact on the relationship between environmental innovation and carbon emissions. According to Albitar et al, (2022), improved environmental governance and environmental innovation together result in lowering CO 2 emissions. According to Afrifa et al, (2020), good governance may be able to control the association between innovation input and CO 2 emissions.…”

The Determinants of CO2 Emissions in the Context of ESG Models at World Level

“…During periods of economic turmoil, companies seem more interested in applying ESG models targeting sustainable goals such as COE [15]. There is a positive relationship between the adoption of ESG models, the environmental-innovation and the reduction of COE for firms listed to the London Stock Exchange-LSE [16]. High ESG scores are negatively associated to a reduction in COE in Nordic countries [17].…”

Corporate Social Environment and Carbon Dioxide emissions Reduction impact on Organizational Performance; mediator role of Social Capital

“…Organizational performance measured by Return on Assets and returns on equity; indicate Co₂ emission was a significant but negative effect or organizational (Alvarez, 2012). Environmental innovation-Co₂ emission and environment governance was significant impact and nexus each other and emphasis the environment governance enhance Co₂ emission reduction (Albitar, Borgi, Khan, & Zahra, 2022). Green logistics work when environmental sustainability in organization (de Souza, Kerber, Bouzon, & Rodriguez, 2022).…”