How do firm-level and country-level sustainability governance shape corporate sustainability? Insights from environmentally-sensitive industries

Mohamed Elmaghrabi, Ahmed Hassanein and Ahmed Diab

Social Responsibility Journal, 2025, vol. 21, issue 5, 1086-1110

Abstract: Purpose - This study aims to explore how firm-level and country-level sustainability governance can shape corporate sustainability performance. Design/methodology/approach - This study uses an international sample of 2,460 observations from 2010 to 2019 for firms in environmentally-sensitive industries (i.e. energy). Various measures have been used to measure corporate sustainability performance, firm-level and country-level sustainability governance. This study uses a range of statistical models, including fixed effects, random effects, a two-step generalized method of moments, along multiple sensitivity checks to provide accurate empirical evidence. Findings - A specialized sustainability committee and environmental management team enhance corporate sustainability performance. Likewise, a country’s regulatory quality and its environmental performance positively affect the sustainability performance of firms operating in this country. Besides, companies operating in a country with a higher gender gap have a lower corporate sustainability performance. Practical implications - Energy firms should prioritize establishing sustainability committees or environmental management teams to enhance sustainability practices. Likewise, policymakers should develop robust regulatory frameworks that promote sustainability. Besides, countries should enforce policies promoting gender equality to enhance corporate sustainability. Originality/value - This study contributes to the literature on environmentally-sensitive industries by examining both firm-level and country-level sustainability governance attributes using three proxies (environmental, social and governance, sustainability strategy and environmental performance) to measure sustainability performance, providing a holistic perspective of how governance attributes influence sustainability outcomes in energy industries.

Keywords: Corporate sustainability; ESG; Sustainability strategy; Environmental performance; Sustainability governance; Energy industries (search for similar items in EconPapers)
Date: 2025
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:srjpps:srj-02-2024-0088

DOI: 10.1108/SRJ-02-2024-0088

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