Abstract:

This research explores the role of multinational corporations (MNCs) in reducing greenhouse gas (GHG) emissions through the lens of pay incentives and corporate sustainability strategies. We utilise one of the extensive datasets to date, entailing 41,370 firm-year observations from 50 countries, spanning a 21-year period (2002-2022). The findings unveil that executive compensation (EC) is associated with increased process-based greenhouse mitigation initiatives (PGGMIs) but has no similar effect on total GHG emissions reduction. Our results provide novel evidence on a reduction in total GHG emissions when sustainability-based incentive policies are integrated with broad board sustainability committee efforts. In additional analyses, we find PGGMIs are positively associated to high levels of total GHG emissions. Our results endorse the perspective of symbolic legitimation, suggesting that MNCs tend to employ PGGMIs to cultivate favourable perceptions among stakeholders and safeguard their legitimacy. A theoretical contribution is made toward understanding how MNCs might operate more efficiently through corporate sustainability strategies. The paper delineates the potential for MNCs to play a more active role in the transition towards a low-carbon economy and help combat climate change.

Please choose your submission type: Full Paper

Primary Track: Sustainable and Responsible Business

Keywords: responsible business;CSR;secondary research/concept paper

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Dr. Danson Kimani