Can environmental management practices moderate the relationship between carbon risk and firm performance in Thailand?

This study investigates the impact of carbon risk (CR) on firm performance (FP) using panel data from 1,504 firm-year observations of Thai-listed companies spanning the period 2021 to 2023. The results indicate that carbon risk, measured both as direct greenhouse gas (GHG) emissions and as total emissions (including direct and indirect emissions), significantly reduces firm performance. The study further examines how environmental management practices (EMPs) moderate this relationship. The analysis reveals that EMPs, such as ISO certification and the establishment of a corporate governance and sustainability committee (CGSC), can effectively mitigate the negative impact of carbon risk on firm performance. This research enhances the understanding of carbon risk management and provides strategic insights for executives, investors, and policymakers involved in advancing Thailand’s transition toward a sustainable low-carbon economy.