Corporate Climate Based Initiatives and Carbon Performance: Evidence from Asian Economies

Abstract

Investors nowadays are increasingly concerned about global environmental problems in the context of sustainability and climate change. Drawing on insights into stakeholders' expectations regarding climate responsibility, this paper investigates the impact of firms' climate-based initiatives and their carbon performance on market value, while accounting for the moderating role of female representation on corporate boards. It seeks to show how gender diversity strengthens the impact of environmental strategies on business performance in several developing economies, contributing to SDG 13 (Climate Action) and SDG 12 (Responsible Consumption and Production) through the lens of social and economic perspectives. Given current research on emerging economies, this study analyses the impact of carbon performance and climate-based initiatives across three South Asian countries: Pakistan, India, and Sri Lanka. A secondary data approach has been employed, using data from Bloomberg, annual reports, and sustainability reports. Panel data has been used for the five-year period from 2019 to 2023. STATA has been used to test the hypothesis employing the Panel Data technique.  The results of this study show that climate-based initiatives positively affect the firm’s market value by improving sustainability efforts. Further, we find that higher emissions scores are associated with lower market value. The presence of female directors on the board strongly influences this relationship. The inclusion of female directors is a key driver of converting sustainability actions into financial benefits through efficient resource utilization and effective board oversight. It supports stakeholders by showing how gender-diverse governance improves sustainable outcomes and guides corporate leaders and policymakers in aligning climate actions with market value.