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CEO Power and Carbon Emissions Management: Australian Evidence

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  • Hoa Luong
  • Jayanthi Kumarasiri
  • Abeyratna Gunasekarage

Abstract

We investigate how CEO power contributes to the emissions management of Australian companies. Constructing a CEO power index and employing firm‐level carbon emissions data, we document a significant negative relationship between CEO power and carbon emissions, suggesting that firms with powerful CEOs better manage their carbon emissions. Extending our analyses into different dimensions of power, we find that the CEO power–emissions management relationship mainly comes from structural power and expert power sources. Further analyses show that emissions management plays a significant mediating role in the association between CEO power and firm performance. A survey administered among sustainability managers of large Australian companies reveals corroborative evidence that the leadership of powerful CEOs is an essential element in managing carbon emissions and mitigating the risk associated with climate change. The findings of this study provide insights to policymakers, regulators and corporate top‐management teams regarding an issue that is under severe public scrutiny and social pressure.

Suggested Citation

  • Hoa Luong & Jayanthi Kumarasiri & Abeyratna Gunasekarage, 2025. "CEO Power and Carbon Emissions Management: Australian Evidence," Business Strategy and the Environment, Wiley Blackwell, vol. 34(2), pages 2239-2272, February.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:2:p:2239-2272
    DOI: 10.1002/bse.4062
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