The existing body of literature with regard to climate‐oriented governance focuses on carbon disclosure and climate change commitments, with a notable omission of an essential aspect of sustainable business practices and decarbonization, that is, environmental innovation. In this study, we examine the effect of climate risk governance on firm‐level environmental innovation. Based on a panel of 4378 firm‐year observations from the nonfinancial S&P 500 components over the period of 2011–2021, we provide novel empirical evidence that corporate climate risk governance is positively associated with environmental innovation. Firms with strong climate risk governance appear to engage more in environment‐friendly innovation to reduce environmental costs and the burden on customers. Further analysis identifies a channel, namely, environmental investment, through which climate risk governance facilitates environmental innovation. Our results remain consistent after we employ an instrumental variable approach and propensity score matching estimates to address potential endogeneity bias. The empirical results also pass a battery of robustness tests with alternative variables and different estimation techniques. This study carries important implications for executive management, regulators, and other stakeholders in relation to reforms in governance structures and the advancement of environmentally sustainable innovation.

中文翻译：

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企业气候风险治理与环境创新


关于气候导向型治理的现有文献侧重于碳披露和气候变化承诺，但明显遗漏了可持续商业实践和脱碳的一个重要方面，即环境创新。本研究考察了气候风险治理对企业层面环境创新的影响。根据 2011 年至 2021 年期间对非金融标准普尔 500 指数成分股的 4378 个公司年度观察，我们提供了新的实证证据，证明企业气候风险治理与环境创新呈正相关。气候风险治理能力强的公司似乎更多地参与环境友好型创新，以降低环境成本和客户负担。进一步分析确定了环境投资，气候风险治理通过该渠道促进环境创新。在我们采用工具变量方法和倾向评分匹配估计来解决潜在的内生性偏倚后，我们的结果保持一致。实证结果还通过了一系列使用替代变量和不同估计技术的稳健性测试。这项研究对执行管理层、监管机构和其他利益相关者在治理结构改革和推进环境可持续创新方面具有重要意义。