Carbon consciousness: The influence of CEO ownership.

ABSTRACT

Building on prior research on managerial ownership and firm performance, this study is the first to link CEO ownership to carbon commitment. We examine if firms led by CEOs with substantial ownership are more or less inclined to prioritise reducing carbon emissions than those without such ownership. We find that higher CEO ownership is associated with a lower carbon commitment, indicating that CEOs with more significant ownership do not prioritise carbon emissions reduction. However, we notice an inverted U-shaped relationship. Particularly, moderate CEO ownership (between 5% and 10% of total shares) has the stronger impact. The results are robust to alternative measures and approaches. The study provides empirical evidence on how CEO ownership can influence corporate carbon commitment and contribute to the global fight against climate change.