Corporate Governance and Carbon Emission Performance: A Study of the Cement Industry in Bangladesh

Grounded in stakeholder and legitimacy theory, this study examines how corporate governance factors influence carbon emissions performance in Bangladesh’s cement industry. The study utilizes data from 2014 to 2023, focusing on four corporate governance factors, board size, board independence, board gender diversity, and the presence of an environmental committee, as main variables alongside carbon emission performance. Firm-specific variables such as return on assets, leverage, and firm size are also included as control variables. Using panel data from six cement companies covering 2014–2023, the study applies the feasible generalized least squares (FGLS) method to address heteroscedasticity, autocorrelation, and cross-sectional dependence. Robustness checks are performed using panel-corrected standard errors (PCSE), pooled ordinary least squares (Pooled OLS), and iterative estimation within the FGLS model. Overall, the findings suggest that corporate governance mechanisms have a significant impact on the carbon emissions performance of the cement industry. Board size is positively associated with carbon emissions, suggesting that larger boards may increase operations that contribute to higher carbon emissions. Conversely, board gender diversity and the presence of an environmental committee are negatively associated with carbon emissions, highlighting the beneficial roles of female directors and the environmental committee in reducing carbon emissions. Board independence shows no significant effect. Among the control variables, return on assets and firm size have a positive influence on carbon emissions, while leverage exhibits an insignificant but negative relationship. This study offers strategic insights for stakeholders, corporate executives, and governments in environmentally sensitive sectors, such as the cement industry.