Do CEOs’ social networks affect carbon emissions in China? The moderating role of CEO reputation

Abstract

Today, it is critical for business and society to manage local and global environmental changes that are degrading every dimension of life. However, there is little evidence on how corporate governance affects firms’ carbon performance from the perspective of CEOs’ social networks. We show that firms with better-networked CEOs have better carbon performance. Our empirical evidence verifies that close social networks between CEOs and TMTs (top management teams) may enhance resource provision rather than aggravate agency problems. Second, we find that CEOs who have received negative media coverage will ensure substantial corporate sustainability practices. Moreover, CEOs will learn carbon knowledge through social networks when firms are in regions with high carbon emissions. These empirical results provide important implications for regulators and managers to improve corporate carbon performance.