Empowering the carbon agenda in diverse workplace: how green innovation, institutional ownership, and gender-inclusive governance drive sustainable performance

Purpose This study aims to examine whether green innovation (GI) strategies, institutional ownership (INSOWN) and gender-inclusive governance (GIG) interact to influence corporate sustainable performance, particularly in the context of a diverse workplace. The study focuses on both financial and environmental, social and governance (ESG) outcomes, providing a comprehensive understanding of the carbon agenda’s effectiveness. Design/methodology/approach Using panel data of publicly listed firms from ASEAN-5 countries over the period 2018–2024, this study applies a two-step system generalized method of moment estimator to address endogeneity and firm-level heterogeneity. Moderation and mediation analyses from PROCESS MACRO HAYES are conducted to explore the roles of GIG and GI as key channels. Findings The results show that GI significantly improves both financial and ESG performance. INSOWN positively influences sustainable outcomes, particularly when firms adopt inclusive governance practices. The interaction between GI and gender-inclusive boards strengthens the impact of carbon strategies, suggesting that board diversity enhances the effectiveness of environmental innovation. Research limitations/implications These findings highlight the need for firms to adopt GI not only as a compliance tool but as a strategic driver of performance. Institutional investors also play a pivotal role in reinforcing sustainability by supporting innovation and inclusive governance. Practical implications Corporate leaders should integrate environmental strategies with boardroom diversity initiatives. Policymakers and regulators can leverage these insights to formulate governance codes that encourage diversity and climate-aligned investments. Originality/value This study offers novel insights by combining the lenses of environmental innovation, ownership structure and inclusive governance to explain variation in sustainable performance. It contributes to the limited literature that empirically links workplace diversity with the effectiveness of carbon strategy.