Impact of country governance mechanisms on carbon emissions performance of multinational entities
Impact of country governance mechanisms on carbon emissions performance of multinational entities
This study investigates the impact of country governance mechanisms on carbon emissions performance of private sector organisations, using empirical evidence from 336 top multinational entities (MNEs) over a 15-year period. The results show that, at the aggregate level, Control of Corruption (b = −0.021, p < 0.01) and Voice & Accountability (b = −0.015, p < 0.05) are significantly and negatively associated with carbon emissions rate. While Political Stability (b = 0.007, p < 0.05) and Government Effectiveness (b = 0.018, p < 0.05) have significant positive impact on carbon emissions rate, the impact of Regulatory Quality and Rule of Law is negative but insignificant. Empirical evidence supports the conclusion that the existing institutional environment is not sufficient to deliver the net zero transition. There is a need for more coordination, strategic planning, and delivery monitoring in government institutions to achieve decarbonisation targets. The study contributes to knowledge within the context of the identified research gaps. First, the study adds to the limited literature on the impact of country governance on carbon emissions reduction, particularly with reference to scope 3 emissions. Second, with the sustainable development goals (SDGs) set to expire by 2030, the study provides empirical evidence on efforts governments of countries are making in achieving decarbonisation targets through improvement in country governance quality. Third, the study shows that the impact of the country governance on the carbon emissions performance of MNEs is contextual and varies across jurisdictions/geographical regions. Finally, the paper contributes to the debate on the actualisation of Agenda 2030, because presenting empirical evidence on the impact of country governance mechanisms on carbon emissions reduction—particularly scope 3 emissions—is an important discourse in the realisation of the SDGs.
Carbon emissions, Country governance, Institutional theory of isomorphism, Legitimacy theory, Scope 3 emissions
Oyewo, Babajide Michael
36c93e4d-3041-4cef-8a0d-9f72f417e249
Tauringana, Venancio
27634458-b041-4bc1-94da-3e031d777e4f
Tawiah, Vincent
d552a085-1b7d-45e7-939b-3e87bb6d779b
Aju, Oluseyi
b6f956b4-6904-4904-be2a-ac977df78b19
February 2024
Oyewo, Babajide Michael
36c93e4d-3041-4cef-8a0d-9f72f417e249
Tauringana, Venancio
27634458-b041-4bc1-94da-3e031d777e4f
Tawiah, Vincent
d552a085-1b7d-45e7-939b-3e87bb6d779b
Aju, Oluseyi
b6f956b4-6904-4904-be2a-ac977df78b19
Oyewo, Babajide Michael, Tauringana, Venancio, Tawiah, Vincent and Aju, Oluseyi
(2024)
Impact of country governance mechanisms on carbon emissions performance of multinational entities.
Journal of Environmental Management, 352, [120000].
(doi:10.1016/j.jenvman.2023.120000).
Abstract
This study investigates the impact of country governance mechanisms on carbon emissions performance of private sector organisations, using empirical evidence from 336 top multinational entities (MNEs) over a 15-year period. The results show that, at the aggregate level, Control of Corruption (b = −0.021, p < 0.01) and Voice & Accountability (b = −0.015, p < 0.05) are significantly and negatively associated with carbon emissions rate. While Political Stability (b = 0.007, p < 0.05) and Government Effectiveness (b = 0.018, p < 0.05) have significant positive impact on carbon emissions rate, the impact of Regulatory Quality and Rule of Law is negative but insignificant. Empirical evidence supports the conclusion that the existing institutional environment is not sufficient to deliver the net zero transition. There is a need for more coordination, strategic planning, and delivery monitoring in government institutions to achieve decarbonisation targets. The study contributes to knowledge within the context of the identified research gaps. First, the study adds to the limited literature on the impact of country governance on carbon emissions reduction, particularly with reference to scope 3 emissions. Second, with the sustainable development goals (SDGs) set to expire by 2030, the study provides empirical evidence on efforts governments of countries are making in achieving decarbonisation targets through improvement in country governance quality. Third, the study shows that the impact of the country governance on the carbon emissions performance of MNEs is contextual and varies across jurisdictions/geographical regions. Finally, the paper contributes to the debate on the actualisation of Agenda 2030, because presenting empirical evidence on the impact of country governance mechanisms on carbon emissions reduction—particularly scope 3 emissions—is an important discourse in the realisation of the SDGs.
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More information
Accepted/In Press date: 29 December 2023
e-pub ahead of print date: 10 January 2024
Published date: February 2024
Additional Information:
Funding Information:
The Authors thank the Handling Editors, Prof. Lixiao Zhang and Prof. David Roubaud for helpful comments that greatly improved earlier versions of the paper. We are grateful to three anonymous reviewers for insightful review comments and constructive feedback.
Publisher Copyright:
© 2023 The Authors
Keywords:
Carbon emissions, Country governance, Institutional theory of isomorphism, Legitimacy theory, Scope 3 emissions
Identifiers
Local EPrints ID: 486208
URI: http://eprints.soton.ac.uk/id/eprint/486208
ISSN: 0301-4797
PURE UUID: 53596f2c-d690-4a0c-b70a-1e28bb7edb1b
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Date deposited: 12 Jan 2024 17:49
Last modified: 18 Mar 2024 04:03
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Contributors
Author:
Babajide Michael Oyewo
Author:
Vincent Tawiah
Author:
Oluseyi Aju
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