Impact of Corporate Governance on Firms’ Environmental Performance: Case Study of Environmental Sustainability-Based Business Scenarios

Ateeq ur Rehman Irshad (), Nabeel Safdar, Zahid Irshad Younas and Wajiha Manzoor ()
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Ateeq ur Rehman Irshad: Department of Mathematics and Sciences, College of Humanities and Social Science, Prince Sultan University, Rafah Street, Riyadh 11586, Saudi Arabia
Nabeel Safdar: Department of Finance and Investment, NUST Business School, National University of Sciences and Technology, Islamabad 44000, Pakistan
Zahid Irshad Younas: Berlin School of Business and Innovation, Potsdamer Street, 180182 Berlin, Germany
Wajiha Manzoor: Department of Economics, COMSATS University Islamabad (CUI), Islamabad 45550, Pakistan

Sustainability, 2023, vol. 15, issue 10, 1-12

Abstract: Environmental performance is a key aspect of business for both shareholders and stakeholders. However, it is necessary to examine whether current practices in corporate governance protect the key interests of shareholders and environmental stakeholders. This study examines how corporate governance affects a company’s sustainability and environmental performance. The study takes a novel approach by dividing businesses into three categories based on various business scenarios for environmental sustainability and evaluating the effect of corporate governance on each scenario in businesses. According to the study, corporate governance is a relative phenomenon whose effectiveness depends on assumptions about how long a company can continue operating under its current environmental conditions. Empirical results show that corporate governance is only effective in business-as-usual environmentally sustainable or highly environmentally sustainable scenarios.

Keywords: business scenario; corporate governance; environmental performance; environmental sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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