Corporate governance, environmental management teams and carbon emissions performance: empirical evidence from Saudi Arabia

Purpose This study aims to examine the direct impact of corporate governance on carbon (CO2) emissions performance, with the moderating influence of environmental management teams (EMT) on Saudi Arabian nonfinancial listed firms. Stakeholder and institutional theories were used to validate these linkages. Design/methodology/approach This study used Saudi Arabian firms as the testing ground, with 440 observations for the period 2017–2024. This study used fixed effects estimation, the Driscoll-Kraay standard error, the two-step system generalized method of moments and subsample analysis. Findings This study shows a positive and notable impact of institutional ownership on CO2 emissions performance. The study also shows that the EMT notably and positively moderates the link between board effectiveness and CO2 emissions performance, reinforcing the role of governance in sustainability strategies. Originality/value Theoretically, this study extends the corporate governance and sustainability literature by highlighting the complementary role of the EMT in strengthening governance mechanisms for carbon emission reduction. Practically, these findings provide valuable insights for investors, policymakers and corporate leaders in Saudi Arabia, emphasizing the need for regulatory frameworks that encourage the formation and effectiveness of the EMT. This study expands the discussion by contributing novelty to environmental and sustainability-related studies on the moderating effect of EMT on the association between corporate governance and CO2 emissions performance in the Saudi Arabian emerging market.