Driving emissions reduction: the power of external sustainability assurance and internal governance committees

The aim of this study is to investigate the relationship between carbon performance and third-party assurance of sustainability, as well as the moderating role of board committees. Using data from companies listed in the STOXX Europe 600 index from 2006 to 2021, the study finds that there is a positive relationship between a firm’s GHG reduction initiatives and external assurance of sustainability. Additionally, the study finds that the presence of sustainability committee and governance committee moderate this relationship, suggesting that companies with dedicated sustainability and governance committees may be better equipped to implement and verify their GHG reduction initiatives. The results are consistent and reliable across various econometric techniques. These findings have important implications for firms pursuing to enhance their eco-friendly practices and for policymakers looking to incentivize and regulate sustainability initiatives.