As environmental concerns become an increasingly urgent global focus, businesses face growing pressure to reduce their carbon emissions. The Top Management Team (TMT) plays a pivotal role in shaping a firm’s sustainability strategies. Despite this importance, a significant research gap remains regarding the precise impact of TMT characteristics—particularly nationality diversity—on corporate carbon emissions. This study investigates the relationship using a global dataset of 4,610 public firms across 52 countries from 2002 to 2019. Leveraging SEC diversity disclosure regulations in the U.S. and CEO deaths as exogenous shocks, our findings reveal that greater top management team (TMT) nationality diversity is associated with lower corporate carbon emissions. This relationship is driven by TMT members, particularly from countries with strong environmental standards. They promote green technology innovation and implement more sustainable governance practices, such as ESG-linked executive compensation and the formation of sustainability committees. Moreover, they enhance sustainable operational practices by promoting sustainable supply chains and effective materials management.
