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

Albitar, K. , Borgi, H., Khan, M. and Zahra, A. (2022) Business environmental innovation and CO2 emissions: The moderating role of environmental governance. Business Strategy and the Environment, 32(4), pp. 1996-2007. (doi: 10.1002/bse.3232)

Abstract

This paper examines the effects of environmental innovation on CO2 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 CO2 emissions including Scope 1 and Scope 2 CO2 emissions. Likewise, our findings are associative of a moderating effect of environmental governance on the environmental innovation-CO2 emissions nexus. We argue that environmental innovation along with better environmental governance leads to a reduction in CO2 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 CO2 emissions.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Albitar, Dr Khaldoon
• Authors: Albitar, K., Borgi, H., Khan, M., and Zahra, A.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Business Strategy and the Environment
• Publisher: Wiley
• ISSN: 0964-4733
• ISSN (Online): 1099-0836
• Copyright Holders: Copyright: © 2022 The Authors
• First Published: First published in Business Strategy and the Environment 32(4): 1996-2007
• Publisher Policy: Reproduced under a Creative Commons licence