Carbon Emission Reduction and Earnings Management: The Moderating Roles of Board Gender Diversity and Board Remuneration in South African Carbon-Intensive Firms

Earnings management (EM) remains a significant concern in corporate financial re-porting, particularly among carbon-intensive companies facing increasing pressure to demonstrate environmental responsibility (ER) while maintaining financial reporting credibility. This study investigates the moderating role of board gender diversity (BGD) and board remuneration (BR) on carbon emission reduction (CER)- earnings manage-ment (EM) relationship among Johannesburg Stock Exchange (JSE)-listed car-bon-intensive companies. This study adopts a quantitative panel data approach, exam-ining 106 companies over the period 2015–2025. Fixed-effects model is employed to es-timate the main relationships, while two-step system generalised method of moments estimation for additional robustness testing. The findings reveal a statistically significant negative relationship between CER and EM, suggesting that stronger carbon emission reduction is associated with reduced earnings management. Furthermore, the findings indicate that BGD and BR shape the CER–EM relationship, highlighting the importance of corporate governance mechanisms in financial reporting behaviour. The study con-tributes to the sustainability reporting literature by showing the relevance of board composition and remuneration arrangements in understanding the environmental re-sponsibility-financial reporting quality nexus.