Corporate governance, policy robustness and carbon neutrality in the digital economy: Insights from the natural resource exploitation sector

Abstract

As the digital economy burgeons, its impact on energy consumption has become increasingly significant, particularly due to the extensive use of electronic machines and devices. This study delves into how corporate governance and its various dimensions influence carbon neutrality within organizations, with a specific focus on the Iron-Ore sector in China – a notable contributor to carbon emissions in the context of digital economic growth. The research also investigates the role of policy robustness in enhancing carbon neutrality, both as a direct influence and as a potential moderator in the relationship between corporate governance and carbon neutrality. Utilizing a panel data methodology, the study analyzes data from 103 organizations across a three-year span, from 2017 to 2019. The findings, derived from stepwise regression analysis, underscore the importance of factors such as environmental disclosure, policy robustness, the presence of institutional investors, corporate governance practices, and organizational size in steering towards carbon neutrality. These insights are crucial in understanding the intricate interplay between these variables and carbon neutrality in the Iron Ore sector, particularly under the umbrella of the expanding digital economy. The study concludes that organizations can significantly enhance their carbon neutrality – thereby positioning themselves as frontrunners in sustainable practices – through improved environmental disclosure, strengthened policy robustness, and a focus on robust corporate governance. This, in turn, contributes to global efforts in mitigating climate change, an imperative in the rapidly evolving digital economic landscape.