How Governance and CSR Reporting Shape Emission Outcomes: A Firm-Level Study from BRICS Countries

Abstract

This study investigates the relationship between corporate governance mechanisms, CSR sustainability reporting, and emission performance in BRICS countries. Based on a panel dataset of 862 firms covering the period from 2018 to 2023, this study investigates the impact of audit committee presence, audit committee expertise, board gender diversity, and board members’ sustainability-related skills on firms’ emission performance. We employ fixed effects models and, to address potential endogeneity concerns, two-stage least squares (2SLS) regression models. The results show that audit committee expertise (β = 2.254, p < 0.01) and board-specific sustainability skills (β = 0.129, p < 0.01) significantly enhance emission performance. Moreover, CSR sustainability reporting positively moderates these relationships, with interaction effects showing stronger environmental outcomes for audit expertise (β = 0.083, p < 0.01) and board sustainability skills (β = 0.001, p < 0.1). In contrast, board gender diversity shows an insignificant or diminishing marginal effect when interacted with CSR reporting. Robustness checks using 2SLS confirm the stability of these findings. The study provides novel evidence on how internal governance structures and sustainability disclosure jointly shape environmental responsibility in emerging economies. Policy recommendations are offered to encourage transparent reporting and strengthen governance mechanisms to support climate-related goals.

1. Introduction

Companies globally are under increasing pressure from shareholders, policymakers, researchers, and environmental and community groups to lower their carbon emissions and improve the transparency of their environmental performance through standardized emission reporting. According to the Carbon Majors Database [1], as of April 2024, just 57 companies were responsible for approximately 80% of global fossil fuel-related CO₂ emissions since the signing of the 2016 Paris Agreement. In response to escalating climate concerns, countries within the BRICS bloc—Brazil, Russia, India, China, and South Africa—have introduced varying degrees of regulatory frameworks to strengthen environmental disclosure and promote corporate sustainability.

India has taken notable regulatory steps by mandating Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013. This provision requires qualifying companies to allocate at least 2% of their average net profits toward CSR initiatives and report these expenditures [2,3]. China has also made significant strides in sustainability reporting. Since April 2024, the stock exchanges in Shanghai, Shenzhen, and Beijing have implemented the Sustainability Reporting Guidelines for Select Listed Companies, requiring large firms to disclose environmental, social, and governance (ESG) and sustainable development information in a consistent and standardized format [4,5]. These guidelines aim to improve the quality and reliability of sustainability disclosures for key stakeholders, including investors, creditors, and regulators.

South Africa stands out among BRICS nations for its advanced sustainability practices, largely driven by the adoption of the King IV Report on Corporate Governance. This framework has institutionalized integrated reporting, encouraging firms to disclose both financial and non-financial performance in a cohesive and transparent manner [6,7]. Brazil, meanwhile, recently adopted the IFRS Sustainability Disclosure Standards (S1 and S2) issued by the International Sustainability Standards Board (ISSB). Under the Brazilian Securities Commission’s Resolution CVM No. 193/2023, sustainability reporting will remain voluntary in 2024 and 2025, but become mandatory starting in 2026 [8,9].

In contrast, Russia has not yet implemented mandatory ESG reporting. Instead, the government introduced a non-binding regulatory framework through the Order of the Ministry of Economic Development of the Russian Federation (2023) [10], which outlines 44 core indicators for voluntary sustainability disclosure [11]. These indicators are meant to serve as guidelines for companies to report on environmental and social impacts, governance practices, and sustainability risks [12,13]. However, the absence of legally enforceable requirements and the government’s allowance for companies to withhold corporate disclosures under sanction conditions have led to an information gap and inconsistent ESG reporting [14,15]. These challenges limit the comparability and accountability of Russian firms’ environmental disclosures, highlighting the softer institutional pressure for sustainability in Russia compared to its BRICS peers. Overall, the BRICS context reflects a diverse mix of mandatory and voluntary sustainability reporting regimes, evolving regulatory landscapes, and varying degrees of institutional enforcement. These differences are particularly important in examining how CSR sustainability reporting moderates the relationship between corporate governance mechanisms and emission performance. Firms operating in more structured and transparent regulatory environments are likely to benefit more from environmental initiatives, while those in loosely regulated contexts may experience limited environmental performance improvements due to weaker accountability and lower disclosure quality.

In recent years, environmental concerns, particularly those related to climate change, carbon emissions, and sustainability, have gained significant attention among policymakers, businesses, and the public. Corporations are increasingly expected to adopt environmentally responsible practices, not only as a legal or regulatory obligation but also as a means to enhance transparency, build stakeholder trust, and ensure long-term value creation. Among the mechanisms available to achieve these objectives, corporate governance and corporate social responsibility (CSR) sustainability reporting have emerged as key drivers of firms’ environmental performance, particularly with regard to managing and disclosing carbon emissions.

Corporate governance mechanisms, such as independent and diverse boards, audit committees, and director expertise, play a critical role in overseeing environmental strategies and ensuring that firms are responsive to stakeholder concerns [16,17]. Prior studies have shown that well-governed firms are more likely to adopt robust emission management practices, improve environmental disclosures, and align business objectives with sustainability goals [18,19,20]. Specific board attributes, such as gender diversity [21,22], audit committee effectiveness [23,24], and board expertise [25,26] have been linked to improved environmental performance and lower greenhouse gas emissions.

At the same time, CSR sustainability reporting has gained prominence as a strategic tool for promoting environmental accountability and communicating sustainability commitments to stakeholders. By disclosing carbon targets, reduction strategies, and performance outcomes, firms demonstrate their responsiveness to stakeholder demands and regulatory expectations. High-quality CSR reporting not only improves firm transparency but also enhances the credibility of corporate environmental actions [27,28,29]. Emerging reporting frameworks and regulatory mandates, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), India’s BRSR, and Canada’s LEEFF, further institutionalize CSR reporting as a core component of environmental governance.

Despite growing evidence on the individual roles of corporate governance and CSR reporting, there is limited understanding of how these two dimensions interact in shaping environmental outcomes. This study aims to bridge this gap by examining the moderating role of CSR sustainability reporting in the relationship between corporate governance mechanisms and carbon emission performance. Drawing on stakeholder theory [30], we argue that CSR reporting strengthens the ability of governance structures to influence firms’ environmental practices by enhancing accountability, stakeholder engagement, and long-term strategic orientation. Firms with strong CSR disclosure practices are more likely to align governance efforts with sustainability priorities, resulting in improved emission performance.

Accordingly, this study investigates whether the positive relationship between corporate governance mechanisms and carbon emission performance is strengthened in the presence of CSR sustainability reporting. In doing so, it contributes to the growing body of literature on corporate environmental responsibility by offering new insights into the combined influence of governance structures and disclosure practices in driving sustainability outcomes.

This study makes several key contributions:

• Theoretical novelty: To our knowledge, this is among the first studies to empirically test whether CSR sustainability reporting moderates the relationship between corporate governance mechanisms and emission performance, particularly within emerging markets.
• Contextual relevance: By using a firm-level panel dataset across five BRICS countries (2018–2023), the study captures institutional heterogeneity in governance quality and disclosure mandates, enabling cross-country insights on how varying regulatory environments shape emission outcomes.
• Empirical strength: The use of both Fixed Effects (FE) and Two-Stage Least Squares (2SLS) models addresses unobserved heterogeneity and endogeneity concerns, providing robust causal inferences.
• Policy relevance: The findings highlight how CSR reporting can enhance the effectiveness of governance mechanisms, offering actionable insights for policymakers seeking to improve corporate environmental accountability in developing economies.

The remainder of this paper is structured as follows: Section 2 presents a comprehensive review of the relevant literature and development of hypotheses. This is followed by the Section 3, which outlines the variable definitions and econometric models used. The Section 4 then presents the empirical findings and interprets them in light of existing theory. Finally, the paper concludes with implications, limitations, and suggestions for future research.

2. Literature Review

2.1. Theoretical Framework

This study is grounded in stakeholder theory, which emphasizes that firms are accountable not only to shareholders but also to a broader group of stakeholders, including employees, customers, regulators, communities, and the natural environment. According to Freeman (1984) [30], firms must manage relationships with these stakeholders responsibly to achieve long-term sustainability and legitimacy.

From the stakeholder theory perspective, organizational accountability extends beyond financial performance to include environmental and social responsibilities. In today’s business environment, growing societal concern about climate change and environmental degradation has led stakeholders to expect companies to actively manage and reduce their environmental impacts, including greenhouse gas emissions [31,32].

Within this context, corporate governance mechanisms play a vital role in aligning corporate practices with stakeholder expectations. Effective governance structures, such as independent boards, gender-diverse leadership, experienced audit committees, and directors with sustainability expertise, can enhance oversight, improve transparency, and ensure that firms address environmental concerns more proactively [33,34]. By doing so, governance mechanisms serve as tools to help firms balance stakeholder interests while pursuing environmentally sustainable business practices [35].

Stakeholder theory supports the idea that corporate boards have a responsibility to ensure that firms consider environmental consequences in decision-making. As Sarkis et al. (2010) [36] explain, stakeholder demands can shape corporate strategies, especially when those demands are linked to social legitimacy and environmental performance. In line with this, Ferrón Vilchez et al. (2017) [37] suggest that corporate governance guidelines increasingly reflect the need for boards to respond to stakeholder concerns by embedding sustainability into the governance agenda.

Moreover, stakeholder theory posits that firms do not always operate solely to maximize profits but may also take actions that benefit society and the environment. This broader perspective explains why firms with stronger governance mechanisms may adopt more responsible environmental practices, including lower emissions, improved carbon disclosures, and stronger sustainability strategies. Stakeholder theory provides a robust foundation for examining the relationship between corporate governance and emission performance. It explains how governance structures help firms respond to stakeholder expectations, improve environmental accountability, and build legitimacy through responsible emissions management.

2.2. Nexus Between Corporate Governance and Emission Performance Linkages

Corporate governance plays a critical role in shaping firms’ environmental strategies and emission outcomes. Strong governance mechanisms enhance transparency, accountability, and strategic oversight, which in turn encourage firms to adopt sustainable practices and reduce their environmental footprint. Numerous empirical studies have established a link between corporate governance attributes and improved environmental and emission performance.

For instance, Bagas Wikantyoso et al. (2024) [18] demonstrated that robust corporate governance structures significantly reduce firms’ carbon emission levels, thereby enhancing overall emission performance. Their findings highlight the importance of strengthening governance practices beyond mere compliance with regulatory requirements to effectively address environmental concerns. Similarly, Abdalla et al. (2024) [38] provided evidence that firms with stronger corporate governance are more likely to disclose higher-quality carbon-related information compared to poorly governed firms. In the context of Malaysia, their study showed that well-governed companies exhibit greater transparency and commitment in carbon emission reporting, indicating that effective governance fosters accountability and responsiveness to environmental issues.

In another study, Khatib and Amosh (2023) [19] emphasized that firms should prioritize the implementation of effective governance mechanisms to support comprehensive emissions management. Their research suggests that sound governance facilitates strategic decision-making related to environmental performance, including setting emission targets, investing in cleaner technologies, and monitoring progress. Furthermore, Shrivastava and Addas (2014) [20] argued that disciplined and engaged governance structures contribute positively to firms’ overall sustainability performance. They noted that when boards are actively involved in environmental oversight and sustainability planning, firms are more likely to implement emission reduction initiatives and improve environmental disclosures. Overall, the literature consistently highlights that corporate governance is a vital enabler of improved emission performance. Audit committee, audit committee expertise, and board characteristics such as diversity, and expertise are associated with stronger environmental outcomes. As the global pressure for corporate climate responsibility intensifies, firms are increasingly expected to strengthen their governance frameworks to effectively manage and reduce their environmental impact. The subsequent discussion reviews the literature on how specific corporate governance mechanisms, such as audit committees, board diversity, and board expertise, are linked to firms’ emission performance.

2.2.1. Nexus Between Audit Committee and Emission Performance

The audit committee is a vital component of corporate governance that plays a central role in ensuring the integrity, accuracy, and transparency of corporate disclosures, including those related to environmental performance. Its influence on emission-related practices has received growing attention in the literature, particularly concerning carbon disclosure and greenhouse gas (GHG) reporting.

Meqbel et al. (2025) [23] highlighted the importance of audit committee size in driving environmental outcomes, demonstrating that larger audit committees are significantly associated with improved emissions performance. Their findings indicate that an increased number of committee members may bring diverse expertise and stronger oversight capabilities, which contribute to better monitoring of environmental practices. Moreover, they found a positive relationship between audit committee size and carbon disclosure, suggesting that larger audit committees promote greater transparency and accountability in reporting carbon-related information. Further supporting this, Abdalla et al. (2025) [39] found that audit committee effectiveness has a significant positive impact on the disclosure of GHG emissions. Their findings reinforce the view that a well-functioning audit committee enhances a firm’s environmental transparency, particularly in contexts where external environmental regulations may be limited or weakly enforced. Similarly, Salleh et al. (2022) [24] emphasized that audit committee effectiveness is critical for ensuring adequate disclosure of greenhouse gas emissions. Their study found that firms with more effective audit committees are more likely to provide comprehensive and reliable emission-related information, aligning their reporting practices with stakeholder expectations and regulatory standards.

In another study, Abdalla et al. (2024) [38] provided further evidence that audit committee effectiveness significantly enhances the quality of carbon emissions disclosure. Their results suggest that effective audit committees not only ensure compliance but also promote proactive disclosure behaviors that reflect a firm’s environmental commitment.

Beyond emission-specific metrics, audit committees have also been linked to broader sustainability reporting practices. Tumwebaze et al. (2022) [40] found a significant and positive relationship between audit committee effectiveness and sustainability reporting quality. Their findings indicate that audit committees contribute to the integration of environmental, social, and governance (ESG) considerations into corporate disclosures, reinforcing the strategic role of the committee in advancing sustainability performance [41].

Overall, these studies underscore the pivotal role of the audit committee in enhancing emission performance and environmental accountability. Audit committee serve as enablers of effective oversight and strategic alignment with sustainability goals. As firms face increasing pressure from regulators and stakeholders to improve climate-related disclosures, strengthening audit committee practices and size emerges as a critical governance lever to ensure reliable, transparent, and performance-oriented environmental reporting [42].

2.2.2. Nexus Between Audit Committee Expertise and Emission Performance

Audit committee expertise, especially in areas such as finance, accounting, and sustainability, plays an important role in improving carbon disclosure and overall emission performance [43]. When audit committee members have relevant expertise, they are better able to review environmental information, ensure accurate reporting, and support better decision-making related to sustainability.

Meqbel et al. (2025) [23] found that audit committees with strong financial expertise have a positive effect on carbon disclosure. Their findings show that financial knowledge helps members monitor and verify carbon-related data more effectively, leading to greater transparency and improved emission performance. Similarly, Chariri et al. (2018) [44] reported that audit committee expertise is linked to better carbon emission disclosure. When members understand environmental and financial information, they are more likely to ensure complete and high-quality reporting of carbon emissions.

Audit committee expertise is also important for broader sustainability efforts. For example, Seth et al. (2024) [45] showed that having expert members on the audit committee is key to achieving strong sustainability performance. These members can help guide companies toward meeting their environmental goals. Likewise, Putri et al. (2023) [46] emphasized that audit committee expertise plays a significant role in influencing how well a company performs in terms of sustainability. Their findings suggest that skilled committee members are better at overseeing environmental strategies, including efforts to reduce emissions. These studies show that audit committee expertise improves both carbon emission performance. As companies face growing pressure to report environmental data, having knowledgeable audit committee members is essential for promoting transparency and helping firms reduce their environmental impact.

2.2.3. Nexus Between Board Gender Diversity and Emission Performance

Board gender diversity has been widely studied as a key element of corporate governance that can influence a company’s environmental performance, particularly concerning carbon emissions. The presence of women on corporate boards is believed to enhance decision-making, improve transparency, and strengthen the firm’s commitment to sustainability goals [47].

Elsayih et al. (2021) [21] found that board gender diversity leads to better carbon emission performance. Their findings suggest that female board members may be more inclined to support environmentally responsible strategies. Similarly, Muktadir-Al-Mukit et al. (2024) [48] reported that board gender diversity has a significant positive impact on environmental performance, reinforcing the idea that gender-diverse boards promote sustainable practices. Several studies also link gender diversity to improved environmental disclosure. Marta Tila Yvonne Augustine 2019 [49] showed that boards with greater female representation are more likely to disclose carbon emission data. Elsayih et al. (2018) [50] found a significant correlation between board gender diversity and the level of carbon transparency, indicating that gender-diverse boards are more open and accountable in their environmental reporting. Yustina et al. (2024) [51] argued that gender diversity can serve as an effective governance mechanism for enhancing carbon emission disclosure. Haque (2017) [52] also observed a positive association between female board representation and carbon reduction initiatives, suggesting that diverse boards support proactive environmental management.

The relationship between gender diversity and voluntary disclosure has been supported by several researchers. Gonenc et al. (2022) [53] found a significant positive effect of board gender diversity on voluntary carbon emission disclosure. Similarly, Valls Martínez et al. (2022) [22] concluded that gender-diverse boards are associated with lower CO₂ emissions, reflecting improved emission performance.

Al-Qahtani et al. (2020) [54] noted that female directors positively influence both the disclosure and management of greenhouse gas information. According to Tingbani et al. (2020) [55], gender-diverse boards help firms respond to a wider range of stakeholder demands and strengthen their environmental legitimacy. Their findings showed strong evidence that gender diversity is positively related to voluntary GHG disclosure, reinforcing the role of women in promoting sustainability at the board level.

Beyond disclosure, gender diversity also supports broader environmental innovation and performance. Gangi et al. (2023) [56] revealed that a higher proportion of women on bank boards contributes to corporate environmental responsibility, especially in eco-innovation and emissions management. Lu et al. (2019) [57] emphasized that gender-diverse boards benefit from a wider mix of experience and perspectives, leading to better environmental decision-making and performance. They argued that such diversity enhances the board’s ability to address complex environmental challenges. Liao et al. (2015) [58] also found a strong positive association between gender diversity and both the likelihood and depth of greenhouse gas disclosures. Lastly, Aliani et al. (2023) [59] showed that board diversity contributed significantly to strong environmental performance in companies recognized for their corporate citizenship, including higher carbon emission scores.

Overall, the literature consistently shows that board gender diversity has a positive impact on emission performance. Diverse boards tend to improve carbon disclosure practices, support emission reduction strategies, and enhance firms’ overall environmental responsibility.

2.2.4. Nexus Between Board-Specific Skill and Emission Performance

Board-specific skills, such as experience and knowledge in environmental and sustainability matters, play an important role in improving a company’s emission performance. Directors with relevant skills are better able to understand environmental issues and support effective strategies for reducing emissions.

De Villiers et al. (2022) [25] found that the experience and qualifications of board members are positively linked to environmental performance. Their study suggests that skilled directors can offer better advice and oversight, which helps companies take stronger action on environmental concerns. Homroy et al. (2019) [60] also showed that when directors have experience in environmental matters, companies tend to have lower greenhouse gas emissions. This indicates that board members who understand environmental risks can encourage better decision-making and ensure more responsible business practices. Similarly, Mardini (2023) [26] reported that a board made up of diverse and experienced members has a positive impact on carbon emission performance. The study found that such boards are more likely to lead companies toward reducing emissions and improving sustainability. Overall, these studies showed that when board members have specific skills and experience related to the environment, firms are more likely to manage emissions effectively. Having the right expertise on the board strengthens environmental oversight and helps firms meet sustainability goals.

Based on the aforementioned discussion, we have framed the following hypothesis:

Hypothesis 1 (H1). 

Corporate governance mechanisms significantly and positively influence emission performance across BRICS countries.

2.3. Nexus Between CSR Sustainability Reporting, Corporate Governance and Emission Performance

CSR sustainability reporting has emerged as an important mechanism for enhancing corporate accountability and guiding firms toward more sustainable environmental practices. As firms face growing pressure from regulators, investors, and society to reduce their environmental impact, CSR reporting can play a moderating role in the relationship between corporate governance and emission performance.

Kateb et al. (2024) [61] argued that CSR reporting can lead to significant changes in firm behavior, generating measurable environmental and social benefits. In line with this, the current study examines how CSR reporting moderates the relationship between corporate governance mechanisms and carbon emission performance. With increasing expectations that firms balance profit-making with environmental responsibility [27], CSR reporting serves as a strategic tool that can reinforce and amplify the environmental role of governance mechanisms [62].

Several studies have highlighted the positive impact of CSR reporting on environmental outcomes. Pérez-Cornejo et al. (2020) [29] found that high-quality CSR reports enhance firms’ environmental and social performance, contributing to improved stakeholder trust and corporate reputation. Khoo et al. (2023) [63] and Radu et al. (2022) [64] further emphasized that CSR reporting fosters transparency and accountability, encouraging firms to embed sustainability into their core strategies. Firms actively engaged in CSR reporting are therefore more likely to implement effective environmental practices, including emissions management, especially during periods of regulatory or policy uncertainty.

CSR reporting creates an external accountability mechanism that motivates firms to fulfill their environmental commitments [28,65]. By publicly disclosing environmental targets, actions, and outcomes, firms signal their long-term dedication to sustainability [66]. Abdesslem et al. (2025) [67] showed that firms with strong governance structures combined with CSR reporting practices are more likely to achieve significant emission reductions. This suggests that CSR reporting enhances the effectiveness of governance mechanisms in shaping environmental behavior. Moreover, improving emission performance through CSR reporting is not just an ethical responsibility but also offers strategic benefits. As noted by Buttel et al. (1997) [68] and Mol et al. (2020) [69], environmental practices such as carbon management contribute to innovation, operational efficiency, and long-term competitiveness, a view supported by the concept of ecological modernization [70,71]. Flammer (2013) [72] adds that environmental CSR activities, including carbon emissions management, are increasingly expected by stakeholders and influence how firms are perceived.

Recent regulatory developments reinforce the importance of CSR reporting. Frameworks such as the EU’s Corporate Sustainability Reporting Directive (CSRD), Canada’s Large Employer Emergency Financing Facility (LEEFF), and India’s Business Responsibility and Sustainability Report (BRSR) mandate standardized environmental disclosures. These policies push corporate governance bodies, including boards and audit committees, to prioritize environmental accountability and transparency. Datt et al. (2019) [73] showed that good carbon performers disclose more key carbon-related information, indicating a genuine commitment to emissions management. Similarly, Meng et al. (2024) [74] found that CSR reporting significantly improves carbon performance, particularly in firms with stronger governance structures and limited global exposure.

Overall, the CSR sustainability reporting strengthens the positive impact of corporate governance on emission performance. It supports governance mechanisms in driving transparency, stakeholder engagement, and emissions reduction. Firms with strong CSR reporting practices are more likely to benefit from the oversight and strategic guidance provided by effective boards and audit committees [75]. In contrast, where CSR reporting is weak or absent, even well-structured governance mechanisms may fall short in improving environmental outcomes.

Hypothesis 2 (H2). 

The magnitude of the positive association between corporate governance mechanisms and corporate carbon emission performance increases when moderated by CSR sustainability reporting.

3. Methodology

Data and Variables

This study investigates the moderating role of CSR sustainability reporting in the relationship between corporate governance mechanisms and emission performance, utilizing panel data from 862 firms operating across BRICS countries, namely Brazil, Russia, India, China, and South Africa, over the period 2018 to 2023. The sample distribution by country and industry are presented in the Appendix A as

Table A1. Tabulation of Country.

Country	Freq.	Percent	Cum.
Brazil	318	6.15	6.15
China	3312	64.04	70.19
India	1134	21.93	92.11
Russia	102	1.97	94.08
South Africa	306	5.92	100.00
Total	5172	100.00

and

Table A2. Tabulation of Industry.

Industry	Freq.	Percent	Cum.
Advanced Medical Equipment & Technology	12	0.23	0.23
Advertising & Marketing	12	0.23	0.46
Aerospace & Defense	24	0.46	0.93
Agricultural Chemicals	72	1.39	2.32
Airlines	24	0.46	2.78
Airport Operators & Services	6	0.12	2.90
Aluminum	36	0.70	3.60
Apparel & Accessories	48	0.93	4.52
Apparel & Accessories Retailers	30	0.58	5.10
Appliances, Tools & Housewares	84	1.62	6.73
Auto & Truck Manufacturers	162	3.13	9.86
Auto Vehicles, Parts & Service Retailers	18	0.35	10.21
Auto, Truck & Motorcycle Parts	132	2.55	12.76
Brewers	6	0.12	12.88
Broadcasting	6	0.12	12.99
Business Support Services	24	0.46	13.46
Business Support Supplies	6	0.12	13.57
Coal	42	0.81	14.39
Commercial REITs	36	0.70	15.08
Commodity Chemicals	258	4.99	20.07
Communications & Networking	72	1.39	21.46
Computer & Electronics Retailers	18	0.35	21.81
Computer Hardware	42	0.81	22.62
Construction & Engineering	216	4.18	26.80
Construction Materials	108	2.09	28.89
Construction Supplies & Fixtures	48	0.93	29.81
Consumer Goods Conglomerates	30	0.58	30.39
Courier, Postal, Air Freight & Land-based Logistics	30	0.58	30.97
Department Stores	24	0.46	31.44
Distillers & Wineries	24	0.46	31.90
Diversified Chemicals	66	1.28	33.18
Diversified Industrial Goods Wholesale	18	0.35	33.53
Diversified REITs	12	0.23	33.76
Drug Retailers	12	0.23	33.99
Electric Utilities	204	3.94	37.94
Electrical Components & Equipment	186	3.60	41.53
Electronic Equipment & Parts	114	2.20	43.74
Entertainment Production	6	0.12	43.85
Environmental Services & Equipment	48	0.93	44.78
Fishing & Farming	30	0.58	45.36
Food Processing	126	2.44	47.80
Food Retail & Distribution	42	0.81	48.61
Footwear	54	1.04	49.65
Forest & Wood Products	12	0.23	49.88
Gold	6	0.12	50.00
Ground Freight & Logistics	18	0.35	50.35
Healthcare Facilities & Services	12	0.23	50.58
Heavy Electrical Equipment	96	1.86	52.44
Heavy Machinery & Vehicles	102	1.97	54.41
Highways & Rail Tracks	36	0.70	55.10
Home Furnishings	18	0.35	55.45
Home Improvement Products & Services Retailers	12	0.23	55.68
Homebuilding	6	0.12	55.80
Hotels, Motels & Cruise Lines	12	0.23	56.03
Household Electronics	18	0.35	56.38
IT Services & Consulting	96	1.86	58.24
Independent Power Producers	78	1.51	59.74
Industrial Machinery & Equipment	156	3.02	62.76
Integrated Hardware & Software	12	0.23	62.99
Integrated Oil & Gas	36	0.70	63.69
Integrated Telecommunications Services	66	1.28	64.97
Iron & Steel	192	3.71	68.68
Leisure & Recreation	6	0.12	68.79
Marine Freight & Logistics	18	0.35	69.14
Marine Port Services	12	0.23	69.37
Medical Equipment, Supplies & Distribution	18	0.35	69.72
Mining Support Services & Equipment	24	0.46	70.19
Multiline Utilities	6	0.12	70.30
Natural Gas Utilities	48	0.93	71.23
Non-Alcoholic Beverages	12	0.23	71.46
Non-Gold Precious Metals & Minerals	36	0.70	72.16
Non-Paper Containers & Packaging	18	0.35	72.51
Oil & Gas Exploration and Production	12	0.23	72.74
Oil & Gas Refining and Marketing	48	0.93	73.67
Oil & Gas Transportation Services	12	0.23	73.90
Oil Related Services and Equipment	30	0.58	74.48
Online Services	36	0.70	75.17
Paper Packaging	30	0.58	75.75
Paper Products	36	0.70	76.45
Personal Products	48	0.93	77.38
Personal Services	6	0.12	77.49
Pharmaceuticals	90	1.74	79.23
Phones & Handheld Devices	12	0.23	79.47
Real Estate Rental, Development & Operations	396	7.66	87.12
Real Estate Services	18	0.35	87.47
Recreational Products	6	0.12	87.59
Renewable Energy Equipment & Services	126	2.44	90.02
Restaurants & Bars	12	0.23	90.26
Semiconductor Equipment & Testing	12	0.23	90.49
Semiconductors	90	1.74	92.23
Shipbuilding	18	0.35	92.58
Software	60	1.16	93.74
Specialty Chemicals	96	1.86	95.59
Specialty Mining & Metals	42	0.81	96.40
Textiles & Leather Goods	42	0.81	97.22
Tires & Rubber Products	54	1.04	98.26
Tobacco	18	0.35	98.61
Water & Related Utilities	42	0.81	99.42
Wireless Telecommunications Services	30	0.58	100.00
Total	5172	100.00

. All the data are sourced from Landon stock exchange group (LSEG) data and analytics database (formerly known as Refinitiv database). To examine these relationships, we employ the Fixed Effects (FE) estimation technique, as indicated by the results of the Hausman test and Breusch-Pagan Lagrange Multiplier (LM) test, which confirmed the suitability of the fixed effects model for controlling unobserved heterogeneity across firms. To enhance the robustness of the findings and address potential endogeneity issues, we further adopt the Instrumental Variables—Two-Stage Least Squares (IV-2SLS) estimation approach. This technique helps ensure the reliability of the estimated coefficients by correcting for possible simultaneity and omitted variable bias. All econometric analyses were conducted using Stata 17. For the instrumental variable estimation, we employed the ivreg2 package, which supports robust and cluster-robust standard errors, first-stage diagnostics (e.g., Kleibergen-Paap and Cragg-Donald statistics), and tests for over-identifying restrictions. The empirical analysis is based on the following estimated equations:

Direct effect:

EMISS_it = β₀ + β₁AUDCOM_it + β₂AUDEXP_it + β₃BGEND_it + β₄BSS_it + β₅FSIZE_it + β₆FLEV_it + β₇ATEN_it + β₈ENVINNit + ε_it

(1)

Moderating effect:

EMISS_it = β₀ + β₁AUDCOM_it + β₂AUDEXP_it + β₃BGEND_it +β₄BSS_it + β₅CSRSUS_it + β₆ AUDCOM_it × CSRSUS_it + β₇ AUDEXP_it × CSRSUS_it+ β₈BGEND_it × CSRSUS_it + β₉BSS_it × CSRSUS_it + β₁₀FSIZE_it + β₁₁FLEV_it + β₁₂ATEN_it + β₁₃ENVINN_it + ε_it

(2)

In this study, EMISS denotes the emission performance of firms and serves as the dependent variable, capturing the effectiveness of a firm’s environmental management practices in reducing harmful emissions. The key explanatory variables include corporate governance mechanisms. AUDCOM indicates the existence of an audit committee within the firm, which is expected to enhance oversight and accountability in corporate decision-making. AUDEXP reflects the presence of experts in the audit committee, assumed to contribute specialized knowledge and improve environmental oversight. BGEND represents the percentage of female directors on the board, which serves as a proxy for board gender diversity, while BSS stands for board members with specific skills. Furthermore, CSRSUS represents the CSR sustainability reporting score, which captures the extent and quality of firms’ disclosures on environmental and social responsibilities. In this study, CSR sustainability reporting is conceptualized as a moderating variable that influences the strength of the relationship between corporate governance mechanisms and emission performance. Specifically, the CSRSUS score is sourced from the LSEG database, which provides a standardized and externally validated measure of corporate sustainability disclosures. The score is constructed based on publicly available and verifiable information disclosed by firms, including standalone sustainability reports, integrated reports, or CSR sections within annual reports [76]. The score ranges from 0 to 100, with higher values indicating a more comprehensive, transparent, and consistent commitment to CSR and sustainability practices. This externally generated score enhances comparability across firms and strengthens the validity of the moderating effect assessed in our model.

Interaction terms—CSRSUS × AUDCOM, CSRSUS × AUDEXP, CSRSUS × BGEND, and CSRSUS × BSS—are introduced to assess the moderating effect of CSR sustainability reporting on the relationship between board governance characteristics and emission performance. These interaction variables help evaluate whether the effectiveness of governance mechanisms in enhancing environmental outcomes is influenced by the extent of CSR disclosure.

Control variables include FSIZE (firm size), which typically reflects organizational capacity and resources; ATEN (audit tenure), which indicates the length of the auditor-client relationship; FLEV (financial leverage), which captures a firm’s debt level; and ENVINN (environmental innovation), which represents investments or activities aimed at developing eco-friendly technologies or practices.

The i denotes the cross-sectional dimension (individual firm), while t refers to the time dimension. The term ε_it is the stochastic error term capturing unobserved influences.

Table 1. Variable description.

Variables	Abbreviation	Measurements/Description	Reference	Source
Dependent variable
Emission performance	EMISS	The emission reduction score measures a company’s commitment and effectiveness towards reducing environmental emissions in its production and operational processes.	[77]	LSEG Data and Analytics
Independent variables
Corporate Governance Mechanisms
Audit Committee	AUDCOM	Does the company have an audit board committee?	[78]	LSEG Data and Analytics
Audit Committee Expertise	AUDEXP	Does the company have an audit committee with at least three members and one “financial expert” within the meaning of Sarbanes-Oxley?	[45]	LSEG Data and Analytics
Board gender diversity	BGEND	Percentage of women among the total members serving on a company’s board of directors.	[52]	LSEG Data and Analytics
Board Specific Skill	BSS	Percentage of board members who have either an industry-specific background or a strong financial background.	[52,60]	LSEG Data and Analytics
Moderator variable
CSR sustainability reporting	CSRSUS	Score of CSR sustainability reporting measures: Does the company publish a separate CSR Sustainability report or publish a section in its annual report on CSR Sustainability? Is there any separate extra-financial report in which the company reports on the environmental and social impact of its operations?	[79]	LSEG Data and Analytics
Control variables
Firm size	FSIZE	Natural logarithm of total assets.	[77]	LSEG Data and Analytics
Financial leverage	FLEV	The ratio of total debt to total assets.	[77]	LSEG Data and Analytics
Audit tenure	ATEN	The duration of time the current auditor has been serving the organization.	[78]	LSEG Data and Analytics
Environmental Innovation	ENVINN	The environmental innovation category score reflects a company’s capacity to reduce the environmental costs and burdens for its customers, thereby creating new market opportunities through new environmental technologies and processes or eco-designed products.	[80]	LSEG Data and Analytics

further presents a brief description of the variables under study.

4. Analysis and Discussion

This section presents the empirical findings on the relationships between corporate governance, CSR sustainability reporting, and emission performance across BRICS countries. The analysis begins with descriptive statistics and correlation analysis to provide an overview of the data and preliminary relationships among variables. This is followed by the main regression results, which assess both the direct effects of corporate governance characteristics and the moderating role of CSR sustainability reporting on emission performance. To ensure the reliability of the results, additional analyses are conducted to address potential endogeneity concerns, using instrumental variable techniques. Robustness checks are also performed to validate the consistency and strength of the findings across alternative model specifications.

4.1. Descriptive Statistics

Table 2. Descriptive Statistics.

Variable	Obs.	Mean	Std. Dev.	Min	Max
EMISS	5172	37.963	28.498	0	99.877
AUDCOM	5172	0.92	0.271	0	1
AUDEXP	5172	0.794	0.405	0	1
BGEND	5172	12.341	11.181	0	75
BSS	5172	41.699	20.746	0	100
CSRSUS	5172	44.98	22.394	0	84.783
FSIZE	5172	9.555	0.726	−0.275	11.595
LEV	5172	85,248.882	6,130,777.2	0	4.409 × 108
LEV_W	5172	0.2696	0.2114	0	1.344
AUDTEN	5172	3.843	4.451	0	28
ENVINN	5172	30.981	32.609	0	538.18
ENVINN_W	5172	30.452	27.704	0	95.81

Notes: This table shows descriptive statistics of the considered variables. Obs. = Observations, Std. Dev. = Standard Deviation, Min = Minimum value, Max = Maximum value, EMISS = Emission performance, AUDCOM = Audit committee members, AUDEXP = Audit committee expertise, BGEND = Board gender diversity, BSS = Board specific skill, CSRSUS = CSR sustainability reporting, FSIZE = Firm size, LEV = Leverage, LEV_W = Winsorized leverage, AUDTEN = Audit tenure, ENINVV = Environmental innovation, ENVINN_W = Winsorized environmental innovation.

presents the descriptive statistics for all variables used in the study, based on 5172 firm–year observations. The dependent variable EMISS (emission performance) has a mean value of 37.96 with a standard deviation of 28.50, indicating moderate variation in emission performance across firms. The minimum value is 0 and the maximum is 99.88, suggesting substantial differences in firms’ emission performance levels. Among the corporate governance mechanisms, the audit committee presence (AUDCOM) shows a mean of 0.92, suggesting that most firms in the sample have an audit committee. Audit committee expertise (AUDEXP) has a mean of 0.794, indicating that around 79% of firms have expert members on their audit committees. Board gender diversity (BGEND) has a mean of 12.34%, with a wide range from 0% to 75%, reflecting significant variation in gender diversity across firms. The board-specific skill (BSS) variable shows an average of 41.70, with a standard deviation of 20.75 and a full range between 0 and 100, indicating variation in the diversity of board expertise. Regarding moderator, the CSR sustainability reporting (CSRSUS) variable has a mean score of 44.98, with values ranging from 0 to 84.78, suggesting that CSR reporting practices vary considerably among firms in BRICS countries.

Control variables include firm size (FSIZE), with an average of 9.56, and leverage (LEV), which has a high mean value of 85,248.88 but a very large standard deviation (6,130,777.2), indicating high dispersion and the presence of outliers. Audit tenure (AUDTEN) has a mean of 3.84 years, with values ranging up to 28 years, showing variation in auditor–client relationships. Finally, environmental innovation (ENVINN) displays an average of 30.98, with a large standard deviation of 32.61 and a maximum value of 538.18, reflecting substantial differences in environmental innovation efforts across firms. Given the observed extreme spread in the leverage (LEV) and environmental innovation (ENVINN) variables, we employed winsorization at the 1st and 99th percentiles to minimize the influence of outliers while preserving sample integrity. The variables for LEV and ENVINN were winsorized and are represented as LEV_W and ENVINN_W in the analysis. Winsorization effectively reduced the influence of extreme outliers and resulted in lower standard errors, thereby improving the robustness of the estimates. This approach ensures robust coefficient estimates by reducing the effect of extreme values without arbitrary deletion.

4.2. Correlation Analysis

The pairwise correlation matrix (

Table 3. Pairwise correlations.

Variables	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
(1) EMISS	1.000
(2) AUDCOM	0.064 ***	1.000
(3) AUDEXP	−0.002	0.577 ***	1.000
(4) BGEND	0.213 ***	−0.014	−0.031 **	1.000
(5) BSS	0.410 ***	0.021	0.089 ***	0.274 ***	1.000
(6) CSRSUS	0.613 ***	−0.033 **	−0.111 ***	0.238 ***	0.444 ***	1.000
(7) FSIZE	0.367 ***	−0.104 ***	−0.161 ***	−0.027 *	0.215 ***	0.340 ***	1.000
(8) LEV_W	−0.025 *	−0.022	−0.041 ***	−0.015	−0.086 ***	−0.022	0.154 ***	1.000
(9) AUDTEN	0.238 ***	−0.152 ***	−0.193 ***	0.257 ***	0.389 ***	0.319 ***	0.217 ***	0.025 *	1.000
(10) ENVINN	0.443 ***	−0.005	−0.097 ***	0.155 ***	0.328 ***	0.434 ***	0.247 ***	0.013	0.219 ***	1.000
Variance inflation factor		1.518	1.626	1.156	1.497	1.518	1.261	1.047	1.327	1.30
1/VIF		0.659	0.615	0.865	0.668	0.659	0.793	0.959	0.753	0.77

Notes: This table shows correlation coefficients of the considered variables. EMISS = Emission performance, AUDCOM = Audit committee members, AUDEXP = Audit committee expertise, BGEND = Board gender diversity, BSS = Board specific skill, CSRSUS = CSR sustainability reporting, FSIZE = Firm size, LEV_W = Winsorized leverage, AUDTEN = Audit tenure, ENVINN_W = Winsorized environmental innovation. *** p < 0.01, ** p < 0.05, * p < 0.1.

) provides insight into the linear relationships among the variables used in the study. The EMISS is positively and significantly correlated with several key variables. Notably, EMISS has a strong positive correlation with CSRSUS (r = 0.613, p < 0.01), suggesting that firms with better CSR reporting tend to perform better in terms of emission outcomes. Similarly, EMISS is positively correlated with BSS (r = 0.410), ENVINN (r = 0.399), Fsize (r = 0.367), and BGEND (r = 0.213), all at the 1% significance level, indicating that larger firms with more diverse and skilled boards and greater environmental innovation tend to have stronger emission performance.

The audit committee variables show mixed relationships. While AUDCOM is positively but weakly correlated with EMISS (r = 0.064), AUDEXP has an insignificant correlation with EMISS. Interestingly, AUDEXP and AUDCOM are highly correlated with each other (r = 0.577), reflecting that audit committees with high presence are often composed of experienced members.

While BSS and CSRSUS are also moderately correlated (r = 0.444), both are significantly related to ENVINN, suggesting that governance quality may be linked with broader sustainability strategies.

The results also include Variance Inflation Factors (VIFs) to test for multicollinearity. All VIF values are below the common threshold of 5, with the highest being 1.626 for AUDEXP. This indicates that multicollinearity is not a concern in the regression models, as all variables fall well within acceptable limits.

4.3. Regression Results

The results of the fixed effects regression analysis (

Table 4. Fixed effect model.

	(1)	(2)
VARIABLES	Direct Effect	Moderating Effect
AUDCOM	2.195 *	−3.212
	(1.2044)	(2.2547)
AUDEXP	2.254 ***	−0.973
	(0.8522)	(1.7625)
BGEND	0.020	−0.031
	(0.0333)	(0.0629)
BSS	0.129 ***	−0.010
	(0.0174)	(0.0317)
CSRSUS		0.163 ***
		(0.0410)
AUDCOM × CSR		0.102 **
		(0.0401)
AUDEXP × CSR		0.083 ***
		(0.0317)
BEGN × CSR		0.000
		(0.0011)
BSS × CSR		0.001 *
		(0.0006)
FSIZE	4.677 ***	4.350 ***
	(1.1542)	(1.0862)
LEV_W	2.168	3.900 **
	(1.7963)	(1.6938)
AUDTEN	0.129	−0.153 *
	(0.0846)	(0.0811)
ENVINN_W	0.153 ***	0.098 ***
	(0.0134)	(0.0129)
Constant	−35.398 ***	−29.738 ***
	(10.9386)	(10.4268)
Observations	5172	5172
Number of firms	862	862
Year FE	YES	YES
F-Stat	323.6	295.7
Prob > F	0	0
Within R-squared	0.495	0.554
Hausman test	94.92 ***	550.63 ***
Breusch-Pagan LM test	3922.19 ***	3305.10 ***

Notes: This table shows results from fixed effect regression, which investigates both direct and moderating effects. AUDCOM = Audit committee members, AUDEXP= Audit committee expertise, BGEND = Board gender diversity, BSS = Board specific skill, CSRSUS = CSR sustainability reporting, AUDCOM × CSR = interaction of AUDCOM and CSRSUS, AUDEXP × CSR = interaction of AUDEXP and CSR, BGEND × CSR = interaction of BGEND and CSR, BSS × CSR = interaction of BSS and CSR, FSIZE = Firm size, LEV_W = Winsorized leverage, AUDTEN = Audit tenure, ENVINN_W = Winsorized environmental innovation. *** p < 0.01, ** p < 0.05, * p < 0.1.

) are presented in two models. The first examines the direct effects of corporate governance mechanisms on emission performance, while the second evaluates the moderating role of CSR sustainability reporting.

4.3.1. Direct Effects Model

Audit committee presence shows a positive and marginally significant effect on emission performance (β = 2.195, p < 0.1), indicating that firms with audit committees are more likely to adopt emission-conscious practices. This is consistent with findings by Abdalla et al. (2025) [39] and Tumwebaze et al. (2022) [40], who emphasized that audit committees improve environmental transparency and oversight. The result aligns with stakeholder theory, which posits that governance structures serve stakeholder interests by improving environmental accountability [30,32].

Audit committee expertise displays a significant positive effect (β = 2.254, p < 0.01), reinforcing the importance of financial and environmental literacy among audit committee members. This aligns with Chariri et al. (2018) [44] and Meqbel et al. (2025) [23], who argue that skilled audit committees ensure accurate environmental disclosures. The finding supports the theoretical proposition that expert governance bodies are better positioned to address stakeholder concerns over environmental risks.

Board gender diversity (BGEND), in contrast, is statistically insignificant in explaining emission performance. This result diverges from prior literature [21,48], which documents positive environmental contributions of diverse boards. A possible explanation lies in the institutional and cultural heterogeneity across BRICS countries, where gender inclusion may be more symbolic than substantive. This aligns with critiques by Lu & Herremans (2019) [57] and Aliani (2023) [59], suggesting that unless women are empowered with decision-making authority, their presence may not significantly shape sustainability outcomes. Such results may also reflect broader challenges of tokenism and limited voice, particularly in patriarchal or hierarchical institutional settings.

Board sustainability skills significantly influence emission performance (β = 0.129, p < 0.01), underlining the relevance of environmental expertise at the board level. This is consistent with De Villiers et al. (2022) [25] and Homroy & Slechten (2019) [60], who found that boards with sustainability knowledge are more likely to implement emission reduction strategies. This finding strengthens the argument that firms benefit from aligning board composition with sustainability demands.

Among control variables, firm size shows a strong and highly significant positive effect, implying that larger firms may have more resources or public pressure to enhance emission performance. Environmental innovation (β = 0.078, p < 0.01) also positively influences emission performance, supporting prior studies (e.g., [20]) that link innovation with improved sustainability outcomes.

4.3.2. Moderating Effects Model

CSR sustainability reporting (CSRSUS) has a strong and statistically significant positive direct effect on emission performance (β = 0.163, p < 0.01). This finding echo prior evidence [61,63,74] that CSR disclosures promote transparency, stakeholder trust, and responsible environmental behavior.

The interaction between audit committee presence and CSR reporting (AUDCOM × CSRSUS) is positive and significant (β = 0.102, p < 0.05), suggesting a synergistic effect where firms with robust governance and disclosure systems are better positioned to achieve environmental objectives. This supports the argument by Ben Abdesslem et al. (2025) [67] that CSR transparency amplifies the impact of board oversight on sustainability outcomes.

Similarly, the interaction between audit expertise and CSR (AUDEXP × CSRSUS) is highly significant (β = 0.083, p < 0.01), reinforcing that technical skills in audit committees complement CSR practices to improve emission performance. These findings provide practical implications for corporate governance and public policy—firms and regulators should emphasize not just CSR disclosure, but also the governance quality that underpins it.

Interestingly, the interaction of board sustainability skills and CSR reporting (BSS × CSRSUS) is weakly significant (β = 0.001, p < 0.1), suggesting that while sustainability expertise contributes positively, its interaction with CSR may be more nuanced or context-dependent.

Of particular note is the insignificant or negative moderating effect of board gender diversity when interacted with CSR (BGEND × CSRSUS). While gender diversity alone may positively influence firm outcomes, its interaction with CSR appears ineffective in enhancing emission performance. This could reflect symbolic CSR or tokenism, as described by Marquis & Qian (2013) [81], where the appearance of diversity and disclosure does not translate into real influence or action. In such settings, CSR may serve more as a legitimacy tool than a driver of substantive change, especially if women on boards lack genuine voice or influence over strategic environmental decisions.

Overall, the improvement in the model’s explanatory power (within R² from 0.490 to 0.553) demonstrates the value of considering both governance structures and disclosure practices in tandem. The robustness of the fixed effects model is confirmed by both Hausman and Breusch–Pagan tests.

4.4. Robustness Check

4.4.1. 2SLS Instrumental Variable Analysis

The 2SLS regression (

Table 5. Instrumental variable (Two stage least square).

	First Stage	Second Stage	First Stage	Second Stage
Variables	Direct Effect		Moderating Effect
L2.BGEN	0.704 ***		0.098 ***
	(0.0224)		(0.0158)
AUDCOM	−0.722	6.001 ***	0.043	3.700
	(0.7741)	(1.8906)	(2.1401)	(4.8745)
AUDEXP	−0.408	3.694 ***	0.301	−5.187
	(0.5106)	(1.2582)	(1.7544)	(4.0566)
BGEN		0.376 ***		1.853 ***
		(0.0616)		(0.6128)
BSS	0.023 **	0.076 ***	0.038	−0.009
	(0.0107)	(0.0283)	(0.0368)	(0.0873)
CSRSUS			−0.175 ***	0.677 ***
			(0.0349)	(0.1403)
AUDCOM × CSR			−0.003	0.047
			(0.0341)	(0.0837)
AUDEXP × CSR			−0.008	0.167 **
			(0.0290)	(0.0712)
BEGN × CSR			0.016 ***	−0.028 ***
			(0.0002)	(0.0102)
BSS × CSR			−0.001	0.001
			(0.0006)	(0.0015)
FSIZE	−2.053 ***	12.827 ***	−0.166	9.498 ***
	(0.2687)	(1.0339)	(0.1096)	(0.9108)
LEV_W	0.741	−7.850 ***	1.053 *	−7.953 ***
	(0.9309)	(2.7087)	(0.5918)	(2.6535)
AUDTEN	0.174 ***	−0.213 **	0.075 ***	−0.469 ***
	(0.0391)	(0.1025)	(0.0147)	(0.1096)
ENVINN_W	−0.006	0.160 ***	0.001	0.106 ***
	(0.0063)	(0.0175)	(0.0027)	(0.0170)
Constant	26.306 ***	−106.800 ***	11.075 ***	−102.410 ***
	(2.5345)	(9.2657)	(2.3800)	(10.9265)
F test of excluded instruments	989.19 ***		38.35 ***
Kleibergen–Paap Rank LM statistic	438.764 ***		30.557 ***
Observations	3448	3448	3448	3448
R-squared	0.418	0.252	0.894	0.310
Year FE	YES	YES	YES	YES

Notes: This table shows results from two stage least square (2SLS), which investigates both direct and moderating effects. AUDCOM = Audit committee members, AUDEXP = Audit committee expertise, BGEN = Board gender diversity, BSS = Board specific skill, CSRSUS = CSR sustainability reporting, AUDCOM × CSR = interaction of AUDCOM and CSRSUS, AUDEXP × CSR = interaction of AUDEXP and CSR, BGEND × CSR = interaction of BGEND and CSR, BSS × CSR = interaction of BSS and CSR, FSIZE = Firm size, LEV_W = Winsorized leverage, AUDTEN = Audit tenure, ENVINN_W = Winsorized environmental innovation. *** p < 0.01, ** p < 0.05, * p < 0.1.

) confirms the main findings and addresses potential endogeneity concerns. The use of lagged gender diversity as an instrument proves statistically valid. Wang and Bellemare (2019) [82] highlight that the use of lagged instrumental variables remains a common and accepted practice in applied econometric analysis. In the direct effects, audit committee presence, expertise, and board-specific sustainability skills maintain strong, positive, and significant effects. The effect sizes are larger than in the fixed effects model, indicating underestimation in earlier estimations, a common issue in the presence of endogeneity.

The moderating model also supports prior findings. CSR reporting again shows a strong main effect (β = 0.677, p < 0.01), and the interaction between audit expertise and CSR is significant (β = 0.167, p < 0.05). Notably, the interaction between board gender diversity and CSR reporting turns significant but negative (β = −0.028, p < 0.01). This may indicate a trade-off effect, where the presence of CSR reporting formalizes disclosure processes, reducing the marginal influence of board gender composition, an interpretation aligned with Tingbani et al. (2020) [55].

These findings confirm the robustness and stability of the study’s central arguments. They also reinforce the relevance of stakeholder theory, showing how CSR and governance structures jointly shape environmental accountability.

4.4.2. Heterogeneity Analyses

The additional heterogeneity analyses (

Table 6. Heterogeneity analyses based on polluting and non-polluting industries.

	Polluting Industry	Non-Polluting Industry	Polluting Industry	Non-Polluting Industry
Variables	Direct Effect		Moderating Effect
AUDCOM	2.634	1.902	−0.891	−5.429
	(1.6031)	(1.7944)	(3.1355)	(3.3157)
AUDEXP	2.316 **	2.372 *	−2.799	1.545
	(1.0771)	(1.3339)	(2.1897)	(2.7967)
BGEND	−0.024	0.057	−0.045	0.001
	(0.0450)	(0.0487)	(0.0827)	(0.0942)
BSS	0.159 ***	0.096 ***	0.085 **	−0.104 **
	(0.0225)	(0.0267)	(0.0410)	(0.0482)
CSRSUS			0.213 ***	0.129 **
			(0.0590)	(0.0580)
AUDCOM × CSR			0.075	0.128 **
			(0.0554)	(0.0587)
AUDEXP × CSR			0.121 ***	0.036
			(0.0398)	(0.0497)
BEGN × CSR			−0.001	0.000
			(0.0015)	(0.0017)
BSS × CSR			−0.000	0.003 ***
			(0.0008)	(0.0009)
FSIZE	3.239 **	6.920 ***	3.218 ***	6.295 ***
	(1.3270)	(2.0641)	(1.2429)	(1.9516)
LEV	5.077 **	−0.010	7.287 ***	1.262
	(2.5236)	(2.5532)	(2.3697)	(2.4110)
AUDTEN	0.132	0.134	−0.163	−0.121
	(0.1054)	(0.1338)	(0.1006)	(0.1283)
ENVINN	0.156 ***	0.149 ***	0.102 ***	0.092 ***
	(0.0179)	(0.0199)	(0.0171)	(0.0192)
Constant	−21.906 *	−56.729 ***	−21.149 *	−46.959 **
	(12.6635)	(19.4391)	(12.1117)	(18.5130)
Observations	2550	2622	2550	2622
Year FE	YES	YES	YES	YES
F-Stat	183.6	148.8	168	136.8
Prob > F	0	0	0	0
Within R-squared	0.531	0.471	0.589	0.532

Notes: This table shows results from heterogeneity analysis, which investigates both direct and moderating effects in polluting and non-polluting industries. AUDCOM = Audit committee members, AUDEXP = Audit committee expertise, BGEND = Board gender diversity, BSS = Board specific skill, CSRSUS = CSR sustainability reporting, AUDCOM × CSR = interaction of AUDCOM and CSRSUS, AUDEXP × CSR = interaction of AUDEXP and CSR, BGEND × CSR = interaction of BGEND and CSR, BSS × CSR = interaction of BSS and CSR, FSIZE = Firm size, LEV_W = Winsorized leverage, AUDTEN = Audit tenure, ENVINN_W = Winsorized environmental innovation. *** p < 0.01, ** p < 0.05, * p < 0.1. Standard errors in parentheses.

) based on polluting and non-polluting industries highlights important distinctions in how corporate governance mechanisms and CSR sustainability reporting both influence emission performance across different industry types. Specifically, AUDEXP demonstrates a positive and statistically significant direct effect on emission performance in both polluting and non-polluting industries, with a slightly stronger effect observed in polluting industries. Furthermore, the interaction between audit expertise and CSR reporting is significant only within polluting industries, suggesting that firms operating in environmentally intensive sectors benefit more from aligning governance expertise with sustainability disclosure efforts.

BSSs also show a strong positive direct association with emission performance in both groups, though the effect is more pronounced in polluting industries. Interestingly, the interaction between board skills and CSR reporting is only significant and positive in non-polluting industries, indicating that in less environmentally sensitive sectors, the disclosure of CSR information can amplify the impact of board-level sustainability expertise. CSR sustainability reporting itself has a stronger positive moderating effect in polluting industries, reaffirming its importance in sectors subject to higher environmental scrutiny and regulatory expectations.

In contrast, AUDCOM and BGEND do not show consistent or statistically significant effects across the two groups, either directly or in interaction with CSR reporting. These findings suggest that while CSR sustainability reporting enhances the impact of governance mechanisms overall, its effectiveness, and that of certain governance attributes, is context-dependent, varying notably with industry-level environmental risk. This reinforces the need for industry-specific strategies when designing governance and sustainability reporting frameworks to improve environmental outcomes.

5. Conclusions

This study offers original and significant contributions by investigating how corporate governance mechanisms, namely audit committee presence, audit committee expertise, board gender diversity, and board-specific sustainability skills, affect firms’ emission performance, and how CSR sustainability reporting moderates these relationships. The research is grounded in stakeholder theory, which asserts that firms are accountable to a wide array of stakeholders, including those concerned with environmental impacts. Unlike previous studies that examine these variables in isolation or within developed countries, this study uniquely integrates multiple governance dimensions with CSR reporting as a moderating mechanism in the context of BRICS countries, an emerging market group with diverse institutional and regulatory structures.

The study tested two core hypotheses. Hypothesis 1, which posits that corporate governance mechanisms positively affect emission performance, is confirmed. Specifically, audit committee expertise and board sustainability skills consistently demonstrate significant positive impacts across both Fixed Effects and 2SLS models. Hypothesis 2, which proposes that CSR sustainability reporting positively moderates the relationship between governance and emission performance, is also confirmed. The interaction effects are strongest for audit committee expertise and board-specific skills, affirming the synergistic role of disclosure and governance capabilities in enhancing environmental accountability. However, the interaction between board gender diversity and CSR reporting reveals a negative or insignificant effect in some specifications, suggesting that gender diversity alone, in the absence of institutional empowerment or strategic alignment, may not enhance sustainability outcomes, a phenomenon supported by literature on symbolic vs. substantive diversity.

These findings advance stakeholder theory by showing that governance mechanisms are more effective in shaping environmental outcomes when firms transparently communicate their sustainability commitments. CSR sustainability reporting functions as an accountability tool that aligns firms’ internal structures with external stakeholder expectations. The study also contributes to theory by highlighting the varying effectiveness of governance elements under different institutional settings, which is especially relevant for emerging economies with evolving ESG regulations.

The policy implications of this research are both practical and contextualized. Regulators across BRICS countries should consider tailoring governance reforms in line with local disclosure requirements. For instance, India’s BRSR framework (Business Responsibility and Sustainability Reporting) mandates ESG disclosures that align well with governance-based oversight. China’s 2024 Sustainability Reporting Guidelines for large, listed firms, introduced through its major stock exchanges, emphasize standardized ESG reporting. Brazil’s adoption of the ISSB’s S1 and S2 standards, set to become mandatory in 2026, also offers an opportunity to embed governance requirements into disclosure mandates. In South Africa, the King IV Code on Integrated Reporting offers a mature model of combining financial and sustainability performance. Meanwhile, in Russia, the lack of binding ESG reporting under the 2023 Ministry Order underscores the need for stronger institutional enforcement. Policymakers should therefore embed governance-specific disclosure mandates within these national ESG frameworks and prioritize not just gender diversity but board-level expertise in sustainability oversight.

The study acknowledges several limitations. First, although 2SLS estimation addresses endogeneity concerns, such as reverse causality between governance quality and emission performance, instrument validity remains a potential constraint. Future studies may employ alternative instruments or dynamic panel methods to validate causal inferences. Second, construct validity limitations arise from relying on secondary datasets (e.g., Refinitiv Eikon) to measure CSR sustainability reporting and governance attributes. These external scores may not fully capture qualitative aspects of governance processes or informal boardroom dynamics. Mixed-methods approaches, including interviews or survey-based assessments, could provide richer insight into firm-level practices. Additionally, while this study draws on a multi-country dataset, further comparative research within specific industries or across legal systems would allow for more granular understanding of governance–disclosure interactions.

In summary, this study confirms that the integration of strong corporate governance mechanisms with credible CSR sustainability reporting significantly enhances firms’ environmental performance in BRICS countries. These results not only reinforce stakeholder theory but also offer empirically grounded recommendations for regulators, boards, and sustainability practitioners. By advancing a governance–disclosure–emission nexus, the findings support the design of more effective ESG policies in emerging economies striving to balance growth with environmental stewardship.