The role of CEO regulatory focus in increasing or reducing corporate carbon emissions

Abstract

This article contributes to the emerging stream of corporate carbon emission research, which zooms in on CEOs' responsibility in organizations' strategic decision‐making. This investigation offers new knowledge of how a CEO's regulatory focus can shape whether firms reduce their carbon footprints. Building on regulatory focus theory, this study proposes how the two distinct motivational dispositions (i.e., promotion or prevention focus) of a CEO relate to corporate carbon emissions. We empirically analyzed S&P 500 firms from 2007 to 2018. The findings indicate that CEOs with a high promotion focus are positively associated with corporate carbon emissions, whereas CEOs with a high prevention focus are negatively linked to corporate carbon emissions, with the latter relationship weakened by industry volatility. The findings reported in this study enrich carbon emission research by devoting attention to cognitive and motivational aspects of CEOs for corporate carbon management.

Diverging Paths: CEO Regulatory Focus, Corporate Social Responsibility, and the Enigma of Firm Performance

“…Prior evidence has demonstrated that different regulatory foci of CEOs have different firm-level responses to various types of strategic decisions, including firm acquisitions (Gamache et al 2015), strategic change (Huang and Zheng 2022), internationalization (Biru et al 2023), and carbon emission performance (Wagner and Fischer-Kreer 2024). Surprisingly, less attention has been paid to exploring the implications of CEO regulatory focus for corporate ethical conduct (e.g., CSR).…”

Do Government Environmental Subsidies Improve Corporate Carbon Performance? Evidence From China

“…In terms of managerial characteristics, Jiang et al (2022) find that enhancing executives' lowcarbon cognition promotes low-carbon practices in high-tech and manufacturing firms. Wagner and Fischer-Kreer (2023) suggest that the promotion focus of a CEO increases corporate carbon emissions, but the prevention focus of a CEO reduces corporate carbon emissions. Additionally, several studies have investigated the impact of environmental information disclosure or internal carbon pricing on corporate carbon performance.…”

“…Firms are the major carbon emitters and thus are expected to take the responsibility to reduce carbon emissions. Against such background, the existing literature has explored the determinants of corporate carbon performance, such as board characteristics (Cahyono et al, 2023;Haque, 2017;Moussa et al, 2020), managerial characteristics (Jiang et al, 2022;Wagner & Fischer-Kreer, 2023), environmental information disclosure (Qian & Schaltegger, 2017), and internal carbon pricing (Zhu et al, 2022). Meanwhile, the government is the leader and manager of low-carbon economy, and its guiding role in regulating firms' low-carbon development practices cannot be overlooked.…”

“…Second, our study contributes to the emerging literature on the determinants of corporate carbon performance. The existing literature largely focuses on how various internal factors of the firm influence its carbon performance, such as board characteristics, managerial characteristics, environmental information disclosure, and internal carbon pricing (Cahyono et al, 2023;Haque, 2017;Jiang et al, 2022;Moussa et al, 2020;Qian & Schaltegger, 2017;Wagner &Fischer-Kreer, 2023;Zhu et al, 2022). However, little is known about the role of the government in shaping corporate carbon performance.…”

Evolutionary Game Analysis of Governments’ and Enterprises’ Carbon-Emission Reduction

“…By 2023, more than 130 countries around the world have made carbon-neutral commitments and implemented a series of policies and regulations to promote low-carbon production [3][4][5][6]. As the main source of energy consumption and carbon emission, enterprises play a crucial role in the implementation of emission reduction policies [7]. However, in reality, due to the lack of governmental guidance, the number of enterprises taking the initiative to reduce carbon emissions is small, and many of them have excessive carbon emissions [8].…”