Top?management compensation and environmental innovation strategy

The increasing awareness of global climate change puts more pressure on firms to reduce their environmental externalities. Managers long ignored this responsibility, which may erode business profits, going against traditional goals. In study, we examine the effect top management's extrinsic incentives (i.e., reward-driven motivation) corporate innovation strategy eco-innovation) using a large dataset S&P1500 non-financial for 2000–2020. results indicate that with greater levels top-management compensation exhibit higher scores eco-innovation engagement. holds after address endogeneity problem through quasi-natural experiment difference-in-differences analysis event Paris Agreement 2015. Our further investigations reveal such positive impact managerial is less intensified in polluting industries but pronounced innovative ones.