Can board environmental orientation improve US firms’ carbon performance? The mediating role of carbon strategy

Moussa, T., Allam, A., Elbanna, S. and Bani-Mustafa, A. 2019. Can board environmental orientation improve US firms’ carbon performance? The mediating role of carbon strategy. Business Strategy and The Environment. Advanced online publication. doi:10.1002/bse.2351

TitleCan board environmental orientation improve US firms’ carbon performance? The mediating role of carbon strategy
TypeJournal article
AuthorsMoussa, T., Allam, A., Elbanna, S. and Bani-Mustafa, A.
Abstract

Overwhelming evidence from prior research suggests a positive association between corporate board characteristics and carbon performance; however, very little is known about the mechanisms linking the two variables. This study attempts to fill this gap by developing and empirically testing a conceptual model that highlights the role of carbon strategy in the relationship between board environmental orientation (BEO) and carbon performance. We argue that BEO can directly and indirectly influence carbon performance through carbon strategy. Using structural equation modelling to analyse data consisting of 2,301 US firm-year observations over the 2005-2015 period, we find that the greater the BEO is, the better its carbon performance (i.e., lower greenhouse gas emissions). The results also provide evidence of the mediating effect of carbon strategy on the relationship between BEO and carbon performance. Splitting the sample into high and low carbon-intensive industries shows a partial mediation effect in high carbon-intensive industries and a full mediation effect in low carbon-intensive industries. The findings of the study and its implications for scholars, policy makers, managers, investors and environmentalists are discussed.

KeywordsBoard of directors
environmental sustainability orientation
environmental performance
greenhouse gas emissions
carbon strategy
US
JournalBusiness Strategy and The Environment
ISSN1099-0836
Year2019
PublisherWiley
Digital Object Identifier (DOI)doi:10.1002/bse.2351
Publication dates
Published online20 Jun 2019

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Accepted author manuscript
Under embargo until 20 Jun 2021

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