TY - JOUR

T1 - Sustainable Institutional Investors and Environmental Decoupling

T2 - Does Carbon Assurance (quality) have an impact?

AU - Velte, Patrick

PY - 2025/3/3

Y1 - 2025/3/3

N2 - This study presents an analysis of the relationship between sustainable institutional investors and environmental decoupling. Moreover, we recognize the moderator effect of carbon assurance (quality) on this link. Based on stakeholder agency theory, we use a sample of listed firms headquartered in the European Union with CDP participation (912 firm-year observations) from the business years 2017-21 and conduct correlation and regression analyses. In line with our theoretical framework, we find that the ratio of sustainable institutional investors with a signature on the UN Principles for Responsible Investment is negatively associated with environmental decoupling. We also note that carbon assurance quality, based on the selection of an audit firm as assuror, reasonable assurance level, and high-quality assurance standards (ISAE3000) strengthen this association. Our results are robust to various alternative specifications, endogeneity checks, and offer major research and managerial implications. Our study mainly contributes to the growing literature on sustainable corporate governance and CSR decoupling. Future research should analyze other environmental or social decoupling attributes and the impact of sustainable corporate governance on these dimensions.

AB - This study presents an analysis of the relationship between sustainable institutional investors and environmental decoupling. Moreover, we recognize the moderator effect of carbon assurance (quality) on this link. Based on stakeholder agency theory, we use a sample of listed firms headquartered in the European Union with CDP participation (912 firm-year observations) from the business years 2017-21 and conduct correlation and regression analyses. In line with our theoretical framework, we find that the ratio of sustainable institutional investors with a signature on the UN Principles for Responsible Investment is negatively associated with environmental decoupling. We also note that carbon assurance quality, based on the selection of an audit firm as assuror, reasonable assurance level, and high-quality assurance standards (ISAE3000) strengthen this association. Our results are robust to various alternative specifications, endogeneity checks, and offer major research and managerial implications. Our study mainly contributes to the growing literature on sustainable corporate governance and CSR decoupling. Future research should analyze other environmental or social decoupling attributes and the impact of sustainable corporate governance on these dimensions.

KW - Management studies

KW - environmental sustainability

KW - environmental decoupling

KW - corporate goverannce

KW - sustainable institional

KW - un pri

KW - Carbon assurance

KW - ökologische Nachhaltigkeit

KW - ökologisches Decoupling

KW - Unternehmensführung

KW - nachhaltige institutionelle Investoren

KW - UN PRI

KW - Klimaprüfung

KW - Sustainability Science

M3 - Journal articles

VL - 47

SP - 37

EP - 64

JO - Zeitschrift für Umweltpolitik & Umweltrecht

JF - Zeitschrift für Umweltpolitik & Umweltrecht

SN - 0931-0983

IS - 1

ER -