Does CSR Governance Improve Social Sustainability and Reduce the Carbon Footprint: International Evidence from the Energy Sector

Abstract

In today’s world, the energy sector is considered the backbone of any economy and plays a key role in carbon trading markets and mitigation actions. This study explores the impact of CSR governance on carbon footprints and the social performances of the energy sector. Using an international sample of 45 countries from 2002 to 2017, we find that the existence of a CSR committee improves the firm’s social responsibility and effectively mitigates the carbon footprint. Further, our results present that a large CSR committee with more experienced board members are effective to implement sustainable business practices. Furthermore, a CSR committee with experienced board members does not mitigate the environmental and social concerns, when energy firms have more powerful CEOs. Collectively, our evidence indicates that the existence of CSR governance is favorable to focus on social issues than environmental ones.

Sustainable Development Goals (SDGs) as a Framework for Corporate Social Responsibility (CSR)

“…In this matter, CSR is positively related to SED [2]. CSR elevates companies' non-financial performance such as carbon footprint mitigation [153], economic development, and the avoidance of greenwashing [154,155].…”

Does CSR Affect the Profitability and Valuation of Energy Companies? An Example from Poland

“…To avoid such a situation, enterprises generating negative externalities are charged with environmental pollution fees. This is especially true of energy companies, which society expects to contribute to environmental sustainability by increasing efficiency, investing in renewable energy sources, improving air quality, reducing carbon dioxide emissions, and protecting biodiversity [50,51]. They should comply with national and international laws and regulations and follow international energy resource efficiency initiatives and practices in order to protect their image [52].…”

“…The literature emphasizes that the environmental reputation obtained by the enterprise improves the company's image and reduces the risk of a crash in the price of its shares [51,54]. From this perspective, CSR can bring benefits to companies by reducing the costs of acquiring new capital (e.g., by issuing new shares).…”

“…Unfortunately, with this awareness, in order to attract environmentally friendly investors and customers (which should result in improved financial results) companies may adopt a greenwashing strategy, revealing manipulated information (reporting CSR activities that they do not undertake or that they undertake to a small extent) [51]. Research on the energy sector supports the occurrence of the signaling theory, without showing the tendency to greenwashing (Karaman).…”

Carbon Footprint and Feedstock Quality of a Real Biomass Power Plant Fed with Forestry and Agricultural Residues

“…The Life Cycle Assessment (LCA) is a measurement tool recognized internationally for performing environmental impact assessment studies [23]. The carbon footprint of products (CFP), a specific ecological impact assessment for greenhouse gas emissions, on energy production and consumption have increased steadily over the past decade, particularly in the EU [24]. Companies are encouraged to report impacts related to their activities in the energy sector.…”