Green from the Inside? Corporate Environmental Behavior and Corporate Governance Configurations

This paper empirically investigates the relationship between corporate governance and corporate greenhouse gas emissions. Firms differ in the extent of emissions even when controlling for sector, size and financial performance, raising the issue of which organizational factors shape this diversity. Highlighting the configurational effects of different corporate governance bundles, Qualitative Comparative Analysis (QCA) is used to analyze 56 large stock market listed corporations in Germany based on data from Thomson Reuters Asset4 and the Climate Disclosure Project (CDP). Germany represents an interesting case to study diverse corporate governance forms given the mixture of coordinated and liberal corporate governance patterns. The empirical results show that “greener” corporations with lower greenhouse gas emissions are associated with long-term oriented corporate governance based on the combination of a long-term oriented majority blockholder, an insider-dominated supervisory board (chaired by a former CEO), the absence of short-term managerial compensation and finally low employee turnover. “Brown” corporations are associated with a short-term oriented governance structure with a governance bundle that is inverse to the “green” configuration. A key implication is that a single corporate governance character is not sufficient to influence how firms react to the challenges of climate change in isolation, but depends on complex configurations. In particular, the commitment to being