**1. Introduction**

At the 75th session of the United Nations General Assembly in September 2020, the Chinese government committed itself to peak carbon emissions by 2030 and to achieve carbon neutrality by 2060 [1]. Enterprises are the main actors in green governance, playing a key role in achieving peak carbon and carbon-neutral targets. China is in a new normal phase, committed to the green transformation of its energy system to reduce heavy pollution [2]. With the implementation of a series of environmental regulation policies and the increased importance society attaches to sustainable development, green innovation is gaining attention from the government, enterprises, and the market. As a means to achieve sustainable development, green innovation is considered conducive to a win-win situation of economic growth and environmental protection [3]. Regulating and guiding enterprises toward cleaner production has become an important way to promote green development. Enterprises face high costs in transitioning and upgrading to cleaner directions, so they find it challenging to meet the needs of green development. Therefore, exploring the optimal development of green innovation has become essential in deepening sustainable goals.

With the implementation of a series of environmental regulation policies and the improvement of society's attention to sustainable development, green innovation has been gradually more valued by the government, enterprises, and the market [4]. Green innovation refers to new or improved products, processes, technology, or practice innovations that mitigate environmental damage [5], and focus on and achieve innovative models of environmental sustainability [6]. At the same time, based on the upper echelons theory, it is believed that executive characteristic factors tend to influence the strategic decisions

**Citation:** Bai, X.; Lyu, C. Executive's Environmental Protection Background and Corporate Green Innovation: Evidence from China. *Sustainability* **2023**, *15*, 4154. https:// doi.org/10.3390/su15054154

Academic Editors: Akrum Helfaya and Ahmed Aboud

Received: 13 January 2023 Revised: 22 February 2023 Accepted: 22 February 2023 Published: 24 February 2023

**Copyright:** © 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

of corporates, which means that the influence of executive characteristics on corporate strategy has become an important focus of academic attention. Prior research has conducted a series of discussions on the antecedents of green innovation, including technological capabilities [7], environmental regulations [8], green knowledge sharing [9], consumer pressure [10], and market demand [11]. However, existing studies are less likely to explore the impact of green innovation from the perspective of executive characteristics. Recent upper echelons theory points out that executives with long experience in a field may develop selective cognition and consider decisions based on cognitive preferences from long prior experience [12]. Executives inject much of their personality, experiences, and values into their behavior. This degree of individualization can determine the formation of strategy or the actions of others, and the organization becomes a reflection of the executives [13]. These characteristics shape the cognitive structure of the enterprise and thus affect the green innovation of enterprises [14]. Executives' reactions to environmental changes as strategic decision-makers in their firms are influenced by their perceptions of environmental issues. If executives view environmental issues as opportunities for corporate growth, they choose forward-looking environmental strategies, which enhance corporate environmental performance [15]. Therefore, this study focuses on an essential but understudied executive characteristic: environmental protection background. This characteristic represents the individual's experience and background in environmental protection. It is unclear whether and how the environmental protection background of executives influences green innovation, and this study aims to fill this gap. Therefore, the motivation of this study is mainly to explore the relationship between an executive's environmental protection background and corporate green innovation and its boundary conditions.

Further to this, an executive's environmental protection background is internalized in the enterprise's strategic decisions, leading the corporate to protect the environment and demonstrate to the outside world that the enterprise is committed to environmental causes. Existing research assumes that the interests of the firm and the managers are perfectly aligned and therefore managers will follow the development of the firm and take the necessary actions for the firm to achieve its goals. However, agency theory emphasizes that there is an inherent conflict of interest in the agency–principal relationship and therefore the need for proper governance [16]. Thus, corporate oversight mechanisms also play a crucial role in aligning the interests of managers and shareholders. Given that media coverage and board independence are two key oversight mechanisms, we explore how they shape the impact of executives' environmental backgrounds on green innovation strategies. On the one hand, media coverage is recognized as an essential monitoring mechanism, as it can act as a watchdog and motivate corporates to work in the interests of shareholders [17]. This is because the media is used as an important tool for external stakeholders to evaluate managers [18]. Stakeholders will not only think that the evaluation role of the media is legitimate, but also use it trigger their actions against companies with poor performance and thus affect managers' capital [19]. On the other hand, the board of directors has been recognized as the primary internal oversight force [20]. Independent directors are more likely to punish managers than inside directors because they "have the incentive to build a reputation as experts in decision control" [21]. However, there is little literature on these topics. This study integrates the upper echelons theory and agency theory, collects data on the executive profiles of the Chinese-listed companies from 2007 to 2021, and uses textual-mining analysis to combine panel data to investigate the impact of executive environmental background on green innovation.

The contributions of this study are: First, this study adds value to the literature on upper echelons theory and green innovation research. Differing from previous studies that only focus on the influence of executives' overseas experience, educational background, and functional background on corporate green strategic behavior, this study incorporates executives' environmental background as an occupational background experience into the upper echelons theory, explores the relationship between executives with environmental background and green innovation, and further improves the research content of the upper

echelons theory from a green innovation perspective, thereby making a new contribution to the upper echelons theory of Hambrick and Mason (1984) [22], as the contributions to this area of the literature in the field of green innovation are few, with some very recent exceptions. This study's framework and insights can help upper echelons theory scholars to understand the environmental context of executives as a tool to understand their green innovation strategies. This study analyzes the influence of executives with environmental protection background on the green innovation strategy from the perspective of their power structure and advances the traditional external incentive determinism of green development to the level of enterprises' independent incentive, which provides a development direction for further improving the incentive path of green development, realizing green transformation, and upgrading. Second, from the perspective of green innovation and based on agency theory, this study explores how the impact of the environmental protection background of senior executives on green innovation depends on media coverage and the independence of the board of directors. The findings of this study on the relative importance of executives' environmental protection backgrounds in green innovation also represent an important development in the study of upper echelons theory and agency theory, as executives' understanding of how firms reallocate resources and capabilities in the face of internal and external supervisory role, enriching the literature on how executive background characteristics influence how firms adjust their strategic choices to accommodate corporate green growth.

#### **2. Literature Review and Research Hypothesis**

#### *2.1. Literature Review*

This study focuses on the impact of executive characteristics on green innovation. Green innovation refers to new or improved products, processes, technology, or practice innovations that mitigate environmental damage [5]. As a vital force for green development driven by energy conservation and environmental protection, green innovation has the double advantage of combining low-carbon energy conservation and efficiency improvement, and is essential for driving a new development pattern of "win-win" for environmental quality improvement [23]. Green innovation has the characteristics of investment uncertainty and a long cycle and reflects the long-term strategic orientation of enterprises [24]. Compared to traditional innovation, green innovation is considered to have knowledge externalities that have a positive impact on the environment during the R&D and diffusion phases.

The upper echelons theory states that executives' experiences, values, and personalities will influence their vision, selective perceptions, interpretations, and ultimately firm outcomes. The literature on upper echelons theory examines how executive characteristics impact green innovation. These studies suggest that executive characteristics can affect green innovation. For example, pilot certificates for executives, better educational experiences, and transformational leadership can lead to better green innovation [25]. Another stream of the literature suggests that executive characteristics can be negative, trivial, or nonlinear in their impact on green innovation [26].

Scholars have studied the impact of executive experience on green innovation based on the upper echelons theory. For example, based on executives' military experience, political experience, academic experience, overseas experience, financial experience, hometown tenure, and richness of career experience, among other perspectives, ref. [27] found a significant effect of executive career experience on green innovation, risk-taking, and economic performance of firms [28]. However, whether the background of executives' environmental protection experience contributes to corporate environmental behavior decisions deserves further research. In addition, the literature closely related to this study focuses on the emotional level of executives' environmental protection awareness. For example, Peng and Liu (2016) [29] found that executive environmental risk awareness and environmental protection benefit awareness play different moderating roles between various stakeholders' environmental protection orientation on corporate eco-innovation. Existing studies have not analyzed the connection to executives' environmental protection background, and studies in the literature have focused more on the impact of executives' environmental protection awareness on their green development, ignoring the analysis of the impact of executives' special experience of environmental protection background on green innovation. Therefore, this study, based on the critical perspective of executives' environmental protection background, will theoretically analyze and validate the mechanism and influencing factors of green innovation to fill the gap in the existing literature.

#### *2.2. Research Hypothesis*

#### 2.2.1. Executive's Environmental Protection Background and Green Innovation

Based on the influence of upper echelons theory on decision-making, this study predicts that the positive impact of executives' environmental protection background on corporate green innovation is reflected in the following two aspects.

First, according to the upper echelons theory, the executive's experiential background will influence the corporate's strategic decisions [30]. This study proposed that executives' environmental protection background is a psychological preference from previous work experience in environmental protection positions. Environmental protection backgrounds are associated with individuals' environmental intentions. Individuals establish ongoing emotional ties to their previous environmental protection experiences in their behavior. As an essential component of corporate green strategy, green innovation consumes fewer resources, produces less waste, improves corporate sustainability, and reduces pollution and damage to the external environment [31]. Therefore, executives with an environmental protection background may be more concerned about the corporate's environmental protection by improving environmental performance.

Second, individuals are more likely to pursue the public interest due to the executive's environmental protection background. Individuals may develop an emotional attachment to the firm and pay more attention to the executive's reputation. They may consider economic factors and the interests of the social group when making strategic decisions [32]. An environmental protection background may stimulate pro-social motivation in individuals, prompting them to focus on goals that benefit others based on their concern for the welfare of the social group. Executives with an environmental protection background may be more concerned about the welfare of social groups and may have an ethical obligation to prevent or solve environmental problems. As a sustainable development model, green innovation benefits both the firm and the ecological environment by reducing environmental protection hazards and improving environmental protection quality [33]. Green innovation strategic decisions affect the firm and extend beyond organizational boundaries to customers, suppliers, employees' families, and other stakeholder members. Therefore, green innovation is seen as a pro-social behavior of firms [34].

Third, executives' environmental protection background enhances green innovation by enriching executives' social network resources as well as enhancing executives' risk appetite propensity. Executives with environmental protection backgrounds have worked in environmental protection functions, companies, industries, geographies, and organizations due to their previous experience. The economic behavior of executives in their social structure will be embedded in their social network relationships, forming a kind of "social capital" [35]. The background of environmental protection experience allows executives to build a wide range of social relationships at work. It also allows the market to recognize executives more fully through their environmental performance and thus have a higher level of trust in their capabilities [36]. In fact, having an environmentally friendly experience gives executives a higher environmental protection philosophy and more prosperous social network relationships that provide many different types of allocatable resources. Wernerfelt (1984) [37] pointed out that in the resource-based view (RBV), a firm is a collection of various resources, and resources are the basis for implementing a corporate's strategy. As an informal institution, social networks can facilitate the search for scarce resources and thus facilitate the development of green innovation [38].

In conclusion, executives' management skills are developed from their personal, especially career experiences that determine their idiosyncratic cognitive structures, values, and decision-making patterns [39]. Executives with environmental protection experience background will impact management psychology and style, showing irrational tendencies such as risk preference, which will affect their cognitive abilities and behavioral choices, and influence green innovation [40]. This study argued that executives from environmental protection backgrounds exhibit pro-social motivations and behaviors. While seeking economic benefits, executives from environmental protection backgrounds are more likely to protect the environment through green innovations. Thus, the following hypothesis is proposed:

#### **Hypothesis 1.** *Executive's environmental protection background positively impacts green innovation.*
