Skip Navigation Links
Journal of Environmental Accounting and Management
António Mendes Lopes (editor), Jiazhong Zhang(editor)
António Mendes Lopes (editor)

University of Porto, Portugal

Email: aml@fe.up.pt

Jiazhong Zhang (editor)

School of Energy and Power Engineering, Xi'an Jiaotong University, Xi'an, Shaanxi Province 710049, China

Fax: +86 29 82668723 Email: jzzhang@mail.xjtu.edu.cn


Impact of Environmental Governance on the Relationship between Environmental Innovation and Level of CO2 Emissions

Journal of Environmental Accounting and Management 13(1) (2025) 65--75 | DOI:10.5890/JEAM.2025.03.006

Tijani Amara, Ali Ahmadi

Department of accounting, law and taxation. Higher Institute of Business Administration, Gafsa University, Tunisia

Download Full Text PDF

 

Abstract

This article examines the impact of the level of environmental innovation on CO2 emissions, and additionally the contribution of the moderating effect of environmental governance score in this relationship. Our findings are associated with a moderating effect of the environmental governance score from the sample of firms on the relation linked the environmental innovation and the CO2 emissions. Furthermore, the results show that environmental innovation associated with better environmental governance leads to a decrease in CO2 emissions. Our findings hold for subsamples of firms with strong/weak environmental governance and ESG performance. We also perform additional analyses and divide the sample into subsamples based on the eco-innovation score and the ESG and environmental governance score. The results show that the level of eco-innovation is important and negatively associated with carbon emissions for firms regardless of whether they have a high or low ESG score.

References

  1. [1]  Ncube, A., Mtetwa, S., Bukhari, M., Fiorentino, G., and Passaro, R. (2023), Circular economy and green chemistry: The need for radical innovative approaches in the design for new products, Energies, 16(4), 1752.
  2. [2]  Hickel, J. and Kallis, G. (2020), Is green growth possible?, New political Economy, 25(4), 469-486.
  3. [3]  Han, M.S., Ma, S.S., Wang, Y., and Tian, Q. (2023), Impact of technology-enabled product eco-innovation: Empirical evidence from the Chinese manufacturing industry, Technovation, 128, 102853.
  4. [4]  Aftab, J., Abid, N., Cucari, N., and Savastano, M. (2023), Green human resource management and environmental performance: The role of green innovation and environmental strategy in a developing country, Business Strategy and the Environment, 32(4), 1782-1798.
  5. [5]  De Guimaraes, J.C.F., Severo, E.A., Junior, L.A.F., Da Costa, W.P.L.B., and Salmoria, F.T. (2020), Governance and quality of life in smart cities: Towards sustainable development goals, Journal of Cleaner Production, 253, 119926.
  6. [6]  Su, C.W., Pang, L.D., Tao, R., Shao, X., and Umar, M. (2022), Renewable energy and technological innovation: Which one is the winner in promoting net-zero emissions?, Technological Forecasting and Social Change, 182, 121798.
  7. [7]  Teixeira, P., Sa, J.C., Silva, F.J.G., Ferreira, L.P., Santos, G., and Fontoura, P. (2021), Connecting lean and green with sustainability towards a conceptual model, Journal of Cleaner Production, 322, 129047.
  8. [8]  Shen, C., Li, S., Wang, X., and Liao, Z. (2020), The effect of environmental policy tools on regional green innovation: Evidence from China, Journal of Cleaner Production, 254, 120122.
  9. [9]  Bradley, S., Mahmoud, I.H., and Arlati, A. (2022), Integrated collaborative governance approaches towards urban transformation: Experiences from the clever cities project, Sustainability, 14(23), 15566.
  10. [10]  Maasoumi, E., Heshmati, A., and Lee, I. (2021), Green innovations and patenting renewable energy technologies, Empirical economics, 60, 513-538.
  11. [11]  Urbaniec, M., Tomala, J., and Martinez, S. (2021), Measurements and trends in technological eco-innovation: Evidence from environment-related patents, Resources, 10(7), 68.
  12. [12]  Dmytriyev, S.D., Freeman, R.E., and Horisch, J. (2021), The relationship between stakeholder theory and corporate social responsibility: Differences, similarities, and implications for social issues in management, Journal of Management Studies, 58(6), 1441-1470.
  13. [13]  Laszlo, C., Cooperrider, D., and Fry, R. (2020), Global challenges as opportunity to transform business for good, Sustainability, 12(19), 8053.
  14. [14]  Chithambo, L., Tingbani, I., Agyapong, G.A., Gyapong, E., and Damoah, I.S. (2020), Corporate voluntary greenhouse gas reporting: Stakeholder pressure and the mediating role of the chief executive officer, Business Strategy and the Environment, 29(4), 1666-1683.
  15. [15]  Flammer, C., Toffel, M.W., and Viswanathan, K. (2021), Shareholder activism and firms' voluntary disclosure of climate change risks, Strategic Management Journal, 42(10), 1850-1879.
  16. [16]  Wu, H., Xu, L., Ren, S., Hao, Y., and Yan, G. (2020), How do energy consumption and environmental regulation affect carbon emissions in China? New evidence from a dynamic threshold panel model, Resources Policy, 67, 101678.
  17. [17]  Xu, B. (2022), How to efficiently reduce the carbon intensity of the heavy industry in China? Using quantile regression approach, International Journal of Environmental Research and Public Health, 19(19), 12865.
  18. [18]  Javeed, S.A., Teh, B.H., Ong, T.S., Chong, L.L., Abd Rahim, M.F.B., and Latief, R. (2022), How does green innovation strategy influence corporate financing? Corporate social responsibility and gender diversity play a moderating role, International Journal of Environmental Research and Public Health, 19(14), 8724.
  19. [19]  Bebchuk, L.A., and Tallarita, R. (2022), Will corporations deliver value to all stakeholders? Vanderbilt Law Review, 75, 1031.
  20. [20]  Baratta, A., Cimino, A., Longo, F., Solina, V., and Verteramo, S. (2023), The impact of ESG practices in industry with a focus on carbon emissions: Insights and future perspectives, Sustainability, 15(8), 6685.
  21. [21]  Volchenko, N., Zhmakin, S., Udovenko, R., Soldatkin, S., and Soldatkin, I. (2023), Combating climate change through the international law perspective: The role of the EU in environmental diplomacy, European Energy and Environmental Law Review, 32(5),
  22. [22]  Pofoura, A.K., Sun, H., Mensah, I.A., and Liu, F. (2021), How does eco-innovation affect CO2 emissions? Evidence from Sub-Saharan Africa, Journal of Environmental Assessment Policy and Management, 23(03-04), 2250017.
  23. [23]  Molthan-Hill, P., Robinson, Z.P., Hope, A., Dharmasasmita, A., and McManus, E. (2020), Reducing carbon emissions in business through Responsible Management Education: Influence at the micro-, meso-and macro-levels, The International Journal of Management Education, 18(1), 100328.
  24. [24]  Fethi, S. and Rahuma, A. (2020), The impact of eco-innovation on CO2 emission reductions: Evidence from selected petroleum companies, Structural Change and Economic Dynamics, 53, 108-115.
  25. [25]  Gao, X. and Fan, M. (2023), Environmental taxes, eco-innovation, and environmental sustainability in EU member countries, Environmental Science and Pollution Research, 30(45), 1-16.
  26. [26]  Fethi, S. and Rahuma, A. (2019), The role of eco-innovation on CO2 emission reduction in an extended version of the environmental Kuznets curve: evidence from the top 20 refined oil exporting countries, Environmental Science and Pollution Research, 26, 30145-30153.
  27. [27]  Mongo, M., Belaid, F., and Ramdani, B. (2021), The effects of environmental innovations on CO2 emissions: Empirical evidence from Europe, Environmental Science and Policy, 118, 1-9.
  28. [28]  Dogan, B., Shahbaz, M., Bashir, M. F., Abbas, S., and Ghosh, S. (2023), Formulating energy security strategies for a sustainable environment: Evidence from the newly industrialized economies, Renewable and Sustainable Energy Reviews, 184, 113551.
  29. [29]  Yang, S., Wang, W., Feng, D., and Lu, J. (2022), Impact of pilot environmental policy on urban eco-innovation, Journal of Cleaner Production, 341, 130858
  30. [30]  Hsu, C.C., Zhang, Y., Ch, P., Aqdas, R., Chupradit, S., and Nawaz, A. (2021), A step towards sustainable environment in China: The role of eco-innovation renewable energy and environmental taxes, Journal of Environmental Management, 299, 113609.
  31. [31]  Mady, K., Abdul Halim, M.A.S., Omar, K., Abdelkareem, R.S., and Battour, M. (2022), Institutional pressure and eco-innovation: The mediating role of green absorptive capacity and strategically environmental orientation among manufacturing SMEs in Egypt, Cogent Business and Management, 9(1), 2064259.
  32. [32]  Uyanik, M. (2023), Resource-Based View in Marketing Literature, Journal of Business and Management Studies, 5(4), 29-39.
  33. [33]  Afrifa, G. A., Tingbani, I., Yamoah, F., and Appiah, G. (2020), Innovation input, governance and climate change: Evidence from emerging countries, Technological Forecasting and Social Change, 161, 120256.
  34. [34]  Tokas, M. (2023), Highest priority trade provisions related to sustainable development and climate change: Streamlining climate change commitments in horizontal chapters of EU-Americas FTAs, Legal Issues of Economic Integration, 50(3),
  35. [35]  Bui, B., Houqe, M.N., and Zaman, M. (2020), Climate governance effects on carbon disclosure and performance, The British Accounting Review, 52(2), 100880.
  36. [36]  Gerged, A.M., Matthews, L., and Elheddad, M. (2021), Mandatory disclosure, greenhouse gas emissions and the cost of equity capital: UK evidence of a U‐shaped relationship, Business Strategy and the Environment, 30(2), 908-930.
  37. [37]  Benlemlih, M., Arif, M., and Nadeem, M. (2023), Institutional ownership and greenhouse gas emissions: a comparative study of the UK and the USA, British Journal of Management, 34(2), 623-647.
  38. [38]  Hashimoto, K. and Hashimoto, K. (2019), Global temperature and atmospheric carbon dioxide concentration, Global Carbon Dioxide Recycling: For Global Sustainable Development by Renewable Energy, 5-17.
  39. [39]  Gur, T.M. (2022), Carbon dioxide emissions, capture, storage and utilization: Review of materials, processes and technologies, Progress in Energy and Combustion Science, 89, 100965.
  40. [40]  Issa, A. and Bensalem, N. (2023), Are gender‐diverse boards eco‐innovative? The mediating role of corporate social responsibility strategy, Corporate Social Responsibility and Environmental Management, 30(2), 742-754.
  41. [41]  Albitar, K., Al-Shaer, H., and Liu, Y.S. (2023), Corporate commitment to climate change: The effect of eco-innovation and climate governance, Research Policy, 52(2), 104697.
  42. [42]  Albitar, K., Liu, S., Hussainey, K., and Liao, G. (2023), Do investors care about corporate environmental responsibility engagement?, International Journal of Business Governance and Ethics, 17(4), 393-415.
  43. [43]  T\"{o}belmann, D. and Wendler, T. (2020), The impact of environmental innovation on carbon dioxide emissions, Journal of Cleaner Production, 244, 118787.
  44. [44]  Al-Shaer, H., Albitar, K., and Hussainey, K. (2022), Creating sustainability reports that matter: An investigation of factors behind the narratives, Journal of Applied Accounting Research, 23(3), 738-763.