Work

Corporate governance and financial performance: Reframing their relationship in the context of climate change

Year: 2023

Type: article

Abstract: In addressing the challenges of climate change (CC), companies face the difficult task of reconciling long‐term environmental goals and short‐term financial interests. In this paper, we argue that that effective climate governance enables companies to balance both objectives, supporting a business case for CC action. For a sample of 832 multinationals for the period 2011–2020, the findings show that effective climate governance leads to higher corporate financial performance (FP) and this relationship is strengthen by better climate performance. Furthermore, effective climate governance is driven by the ownership of long‐term institutional investors, whose positive influence is reinforced by homogeneous distribution of their ownership. We provide a broad analytical framework that considers the determinants and effects of climate governance, from which theoretical and practical implications can be derived.

Source: Corporate Social Responsibility and Environmental Management

DOI: 10.1002/csr.2649

Authors: Beatriz Aibar‐Guzmán, Nicola Raimo, Filippo Vitolla, Isabel‐María García‐Sánchez

Institutions: Universidade de Santiago de Compostela, University of Bari Aldo Moro, Universidad de Salamanca

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Climate action

Open Access status: hybrid

Estimated APC paid: $3,710