Board gender diversity and environmental emissions

Abstract

Abstract The recent climate emergency declaration by many nations around the world signifies the severity of the impact of climate change. As an entity which consumes a large quantity of resources ranging from material to human, corporations have a responsibility to seriously tackle climate change. As a company's board of directors is typically responsible for developing business strategies, including environmental strategies, this paper explores whether gender diversity on corporate boards affect firms' emission performance. Consistent with diversity theory, we find that board gender diversity is positively associated with firms' emission reduction performance. The likelihood that a firm with a gender diverse board reduces environmental emission is 9% higher than its industry peers. To ensure that our results are robust to endogeneity, we conduct additional analyses including propensity score matching (PSM), entropy balancing, and instrumental‐variable analysis.