Corporate Climate Policy and CEO Age: Age Matters

Abstract

Addressing climate change is a complex generational challenge requiring action from governmental frameworks, corporate strategies, and current and future leaders. As individuals age, their risk aversion typically increases and potentially hindering long-term planning. We hypothesize that older CEOs might be less inclined to engage in greenhouse gas reduction activities due to factors like risk aversion or limited outlook. Our analysis on 77 countries revealed a negative relationship between CEO age and the presence of greenhouse gas emissions policies and targets within company. This finding is robustness to alternative econometrics specifications, variable specifications and sub-samples. Our study suggests that older CEOs are making short-term decisions and failing to consider generational challenges. However, at the same time suggests that the presence of younger influential executives could moderate this trend. Thus, enrolling companies into generational challenges may require a reconsideration of governance structures.

Keywords: Corporate Climate Leadership, Corporate Governance, CEO Age