Tracing the Paths to Sustainable Production and Consumption Through Indigenous Directors, Environmental Innovation, and Sustainability Committees

Abstract

This study investigates the influence of indigenous directors on sustainable production and consumption in the energy sector of Latin America and the Caribbean (LAC) countries, while considering the moderating roles of environmental innovation and sustainability committees. Using panel data from 378 firms across the LAC region from 2012 to 2023, the study employs robust econometric methods, including quantile regression, IV‐GMM, and IV‐2SLS, to address potential endogeneity issues and ensure reliable results. The findings reveal that indigenous directors significantly promote SPC initiatives across lower, middle, and upper quantiles. Also, environmental innovation not only directly impact SPC but also enhances the positive influence of indigenous leadership on sustainable practices, particularly at higher quantiles. Additionally, the presence of a sustainability committee amplifies the link between indigenous directors and SPC, across all quantiles. The analysis also uncovers substantial heterogeneity effects driven by regional, policy, industry, and stratification dynamics. This study contributes to the growing literature on corporate governance and sustainability strategy, offering actionable insights for policymakers, corporate leaders, and practitioners seeking to foster sustainable business practices in emerging markets.