ESSAYS IN CORPORATE SUSTAINABILITY

Abstract

This dissertation comprises three essays that examine various aspects of corporate environmental sustainability.

Chapter 1 studies the impact of legal expertise in corporate leadership on improving corporate environmental sustainability performance by focusing on the role of general counsels (GC). Utilizing firm-level ESG data from 2002 to 2020 and employing probit model, while controlling for a host of firm characteristics, I find that firms with GCs in their top management teams are more likely to achieve better environmental performance, notably in emissions reduction. The relationship is robust to the models using peer firm GC ratio as an instrumental variable as well including industry fixed effects. However, these firms also tend to report higher greenhouse gas emissions, suggesting potential greenwashing. The improved environmental scores can be partially explained by GC firms establishing good awareness of climate change risk and opportunities as well as environmental training.

In Chapter 2, an environmental regulation aiming energy consumption reduction is evaluated regarding the impacts on firm green innovation. In 2006, the Chinese central government introduced a policy mandating significant reductions in energy consumption by the top energy-consuming enterprises to achieve energy conservation objectives. This paper investigate the impact of this pivotal energy regulation aimed at the most energy-intensive Chinese manufacturers on their green innovation endeavors. Leveraging micro-level enterprise data and employing generalized difference-in-differences (DID) research designs, this study demonstrates that more stringent environmental regulation leads to a 2 to 4 percent increase in corporate green innovation. The findings remain robust across various alternative control groups and green innovation metrics.

Chapter 3 investigates the interaction between wind energy development and biodiversity conservation. The rapid expansion of wind energy development represents significant progress towards achieving sustainable energy goals, but also can be accompanied by negative impacts on eagle fatal- ities and biodiversity. We investigate wind energy firms’ participation in golden eagle conservation, as represented by wind facilities’ choice to obtain an eagle incidental take permit. Under the US Eagle Protection Act, even unintentional take of golden eagles without an incidental take permit is illegal, and firms must mitigate or offset anticipated harm to obtain a permit. We combine theory and empirical analysis to explore the factors driving wind energy firms’ decisions on permitting. We find that golden eagle exposure and collision risk, as well as noncompliance detection likelihood and penalty intensity, positively influence firms’ permitting inclination. Current low rate of par- ticipation in permitting could be attributable to less intensive enforcement and the perception of low expected penalty costs for noncompliance compared to relatively high permitting costs.