A Greener Paradigm Shift: The Moderating Role of Board Independence in Sustainability Reporting

This study investigates the moderating role of independent directors on corporate boards in raising the ESG reporting for non-financial listed firms in Pakistan to strive for a greener revolution around the economy. A sample of 369 firms listed and operated on the Pakistan Stock Exchange (PSX) for a period covering 2012–2023 (both inclusive) have been taken out of a target population of 456 non-financial listed firms. The results are investigated using bivariate, multiple, and hierarchical regression analyses. This study has significant findings in the context of Pakistan and can be generalized to struggling economies around the globe. The interventional role of independent directors has significant findings for the full model. Findings from the Corporate Social Responsibility Strategy Score (CSRSS) are inconclusive irrespective of the measurement method used, i.e., environmental innovation score (EIS) or environmental pillar score (EPS). Environmental, Social, Governance Score (ESGS) has revealed a positive and significant impact when EIS is used as a performance variable, whereas when EPS is taken as a performance measure, the results are significant and negative. Under the lens of stakeholders’ theory, upper echelon theory, and agency theory, this study contributes to the corporate governance domain and the literature on environmental improvisation and ESG reporting. Researchers, statutory authorities, and academicians can benefit from it. The vital role of independent directors is the key to developing economies to strive for a sustained greener environment. This study is the first in the Asian and, specifically, Pakistani context to take on the interventional role of independent directors in promoting ESG reporting requirements for corporate greener revolution efforts.