Chief Sustainability Officers and Green Innovation: The Moderating Role of Sustainability Committee and Industrial Concentration

Abstract

Firms across the globe are increasingly appointing Chief Sustainability Officers (CSOs) to lead their environmental agendas, yet we know little about how these officers influence innovation outcomes. This study examines the role of CSOs in driving green innovation and investigates the conditions under which their impact is augmented. Drawing on upper echelon and institutional theories, it is argued that CSOs positively influence green innovation, and the sustainability committee amplifies whereas high industry concentration inhibits their effect. Using the firm and board-level data from 816 multinationals from G7 countries and applying system GMM estimation technique, the empirical results show a positive and statistically significant effect of CSOs on a firm’s green innovation. This effect is found to be stronger when the sustainability committee has more power and industry is less concentrated. These findings highlight the effectiveness of CSOs in driving green innovation and show how this influence is shaped by governance structures and industry competitiveness.