Do Environmental Management Policies Decrease Carbon Emissions? A Probabilistic Analysis of G7 Countries

This paper examines the effect of an Environmental Management System (ENVMSB) on carbon dioxide emissions reduction, taking into account the role of Greenhouse Gas emissions taxes (TaxGHG) as well as a Sustainability Committee (CSRSC) in an international sample. To test our hypotheses, we use a sample of 9944 firm-year observations in the G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom and United States) from 2013 to 2022. The econometric approach uses a logistic regression panel data model. The empirical results show that both ENVMSB and CSRSC significantly and positively reduce carbon dioxide emissions. However, we did not find evidence of a significant effect of TaxGHG on carbon dioxide emissions reduction. Moreover, the probabilistic analysis of carbon reduction shows heterogeneity behavior by countries and sectors related to various national policies. industrial practices. and alignment with international environmental initiatives. including United Nations initiatives. These findings have important implications for managers and regulators concerned with firm ecological performance.