Corporate governance and emission performance: Malaysian evidence on the moderating role of environmental innovation

Abstract

Abstract This study examines the effects of corporate governance mechanisms on emission scores. Furthermore, it evaluates the moderating effect of environmental innovation activities on the association between corporate governance mechanisms and emission performance. The sample consists of 122 Malaysian companies in several sectors. Data were extracted exclusively from the Refinitiv Eikon database for the period 2016–2023. This study adopted a panel data approach with a fixed-effect estimation, fixed effect with the Driscoll–Kraay standard error, and a generalized method of moments. The findings reveal that audit expertise, audit independence, board expertise, and board-specific skills have a statistically significant negative impact on emission performance. Furthermore, the results show that environmental innovation has no substantial moderating effect on the links between audit committee characteristics and emission performance. However, environmental innovation moderates the association between board attendance, gender diversity, and emission performance. This study makes several valuable contributions to the existing body of literature. Our study offers a distinct and thorough assessment of board and audit committee characteristics and environmental innovation, setting it apart from the previous research conducted in Malaysia.

Keywords

• Emission performance
• Corporate governance
• Environmental innovation
• Malaysia