Climate board governance and carbon assurance – European evidence

Purpose: This paper investigates the effect of climate board governance, based on (1) carbon change committees, (2) critical mass of female board members, and (3) carbon-related executive compensation, on the voluntary implementation and quality of carbon assurance.
Design/methodology/approach: Using stakeholder and critical mass theories, 978 firm-year observations for European Union firms for the 2017-2021 period are collected. Climate board governance and carbon assurance proxies come from the CDP.
Findings: Correlation and logit regression analyses show that climate board governance significantly improves carbon assurance (quality). Our findings are robust to various robustness and endogeneity checks and are of great importance for researchers, regulators, and business practice.
Originality/value: This analysis mainly contributes to previous studies by using a combined sustainable board governance score as a major driver of corporate carbon assurance practices for the first time.