Abstract
Purpose: This paper investigates the corporate governance impact of a CSR sub-committee on the reduction of carbon emissions during the COVID-19 pandemic.
Design/methodology/approach: Drawing on an international sample of 8,904 firm-year observations from 45 countries spanning 2018–2021, we examine whether there is variation in the relationship between the firm’s CSR focus and carbon reduction prior to and during the COVID-19 pandemic. The study employs governance metrics, including CSR sub-committee presence, carbon emission scores, and corporate governance index scores. It also controls for firm size, profitability, leverage, industry sensitivity, and cross-country factors such as GDP growth and regulatory strength.
Findings: The empirical findings reveal that firms with CSR sub-committees exhibit greater reductions in carbon emissions both before and during the COVID-19 pandemic. This effect is magnified in countries with strict lockdowns and industries with higher environmental sensitivity. However, firms under higher value pressure during the pandemic showed diminished emission reductions. However, they still performed better than their peers without a CSR sub-committee. The findings highlight the important role of governance structures during periods of exogenous shock.
Originality/ value: This research provides empirical evidence on the interplay between corporate governance, sustainability committees, and GHG emission reductions during a global crisis. This paper fills the gaps in the literature by examining these dynamics in a global and multi-industry context. It offers insights for policymakers, corporate leaders, and sustainability advocates who seek to balance organizational strength with environmental responsibility.
Keywords: Corporate governance, CSR Committee, Greenhouse gas emissions, Carbon emission reduction, COVID-19 pandemic.