Does Board Gender Diversity Matter for Engagement in the Science-Based Targets Initiative?

Abstract

This study investigates the impact of board gender diversity on corporate engagement in the Science-Based Targets initiative (SBTi). Drawing from stakeholder and resource dependence theories, we hypothesize that increased female representation on boards strengthens a firm's adherence to scientifically validated climate targets. Our research encompasses all capital market–oriented firms actively engaged in the SBTi from 2015 to 2023 in Europe and North America, complemented by a control group of firms with similar characteristics. We apply coarsened exact matching and instrumental variable probit models to control for potential endogeneity and ensure the robustness of our analysis. The results indicate a positive relationship between board gender diversity and SBTi engagement. This research enriches the growing body of literature on SBTi, underscoring the role of board gender diversity in enhancing corporate environmental responsibility and offering practical insights into how improved governance can advance sustainability strategies.