Evaluating the Influence of Board Characteristics on Environmental Decoupling: Evidence From Europe

Sabrina Pisano, Luigi Lepore, Raffaela Nastari and Bakr Al‐gamrh
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Sabrina Pisano: PARTHENOPE - Università degli Studi di Napoli “Parthenope” = University of Naples
Luigi Lepore: PARTHENOPE - Università degli Studi di Napoli “Parthenope” = University of Naples
Raffaela Nastari: PARTHENOPE - Università degli Studi di Napoli “Parthenope” = University of Naples
Bakr Al‐gamrh: ESC [Rennes] - ESC Rennes School of Business

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Abstract: This study investigates the relationship between corporate governance characteristics and environmental decoupling, that is, the misalignment between environmental disclosure and environmental performance. We analyze a sample of 728 European companies (3061 firm-year observations) belonging to 18 industries and 20 different countries from 2017 to 2023. The results show that companies tend not to disclose all the environmental actions implemented, indicating underreporting behavior. The results also reveal that board independence, board gender diversity, and the presence of a CSR committee mostly foster a reduction in environmental decoupling. Furthermore, these corporate governance characteristics are also found to be effective mechanisms in enhancing companies' environmental performance. However, only the presence of a CSR committee has a strong positive effect on the quantity of environmental information disclosed. Although companies tend to underreport environmental data, the level of environmental decoupling decreased in 2023, demonstrating that the introduction of more stringent requirements for environmental disclosure (i.e., the Corporate Sustainability Reporting Directive 2022/2464/EU) could promote better alignment between sustainability disclosure and performance. The findings provide important recommendations for companies, regulators, and standard setters on how to design and configure the board of directors to align environmental disclosure and performance.This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes.

Keywords: independent board member; disclosure-performance gap; CSR committee; Corporate social responsibility; Board gender diversity; Agency theory (search for similar items in EconPapers)
Date: 2025-05-19
Note: View the original document on HAL open archive server: https://hal.science/hal-05245351v1
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Published in Business Strategy and the Environment, 2025, 34, pp.7300 - 7323. ⟨10.1002/bse.4350⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05245351

DOI: 10.1002/bse.4350

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