UDTR Global Rights of Nature Radar

How Environmental Regulations Influence ESG Controversies: The Role of Climate Governance and Environmental Decoupling

Identification

Public canonical key

radar:r-93be9252c6312b43d6fdc19fdfe10db9

Authors

Hussain Muhammad · Mohamed Aman

Reported year

2025

Reported language

en

Source type

article

First detected

2026-11-14T09:37:08.495294+00:00

Last metadata observation

2026-11-14T09:37:08.495294+00:00

Last HTTP verification

Not checked

Institutions reported by the source

American University of Ras Al Khaimah · University of Chieti-Pescara

Reported affiliation countries

AE · IT

Documentary abstract — original language

ABSTRACT This study examines how environmental regulations influence ESG controversies, with climate governance as a moderating factor and environmental decoupling as a mediating mechanism. Using 5110 firm‐year observations from European‐listed firms in the STOXX Europe 600 index between 2010 and 2024, our analyses yield three main findings. First, stringent environmental regulations significantly reduce ESG controversies by increasing compliance pressure, discouraging violations, and mitigating stakeholder skepticism. Second, environmental regulations reduce environmental decoupling, which in turn influences the extent of ESG controversies. This indicates that environmental decoupling mediates the relationship between environmental regulation and controversies, as firms may use it to obscure gaps between reported and actual performance, lowering external scrutiny. Finally, strong climate governance supports regulatory compliance, mitigates ESG controversies, and provides safeguards during adverse events. Robustness checks confirm the stability of the results. These findings offer practical implications for scholars, policymakers, and regulators aiming to strengthen corporate accountability and transparency.

Identifiers

OPENALEX

https://openalex.org/W4415342459

DOI

10.1002/csr.70235

Documentary context

Documentary family

article

Source-reported types

article

Publishers

Wiley

Entity mentions are not evidence of legal recognition. Jurisdiction studied is separate from author affiliation country.

Sources

OpenAlex · Record 1

• Document · https://doi.org/10.1002/csr.70235

Documentary status

Relevance pending

Library

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