Women on Board and Climate Change: An Illustration Through Greenhouse Gas Emissions

Abstract

Women directors' role in addressing climate change is the source of increasing scholarly interest. We study the impact of women directors on greenhouse gas (GHG) emissions worldwide using a dataset of 2758 firms listed in 36 countries between 2002 and 2019 and reveal a significantly negative association between women board directors and GHG emissions, including direct as well as indirect GHG emissions. In recent years, many countries have enacted board gender quotas, leading to a marked rise in women's board representation. Our findings indicate that the marginal effect of women directors on GHG emissions after implementing gender quotas also remains negative and highly significant. We also note that the impact of women directors on GHG emissions is significant when the board has two or more women and is mainly influenced by independent rather than executive women directors. Moreover, industry nature and climate change action-oriented compensation policies drive the relationship between women directors and GHG emissions. The results remain robust to alternate proxies, various subsample analyses, and alternative specifications and offer significant research and managerial implications. This study contributes to the emergent literature on the role of women directors and board gender quotas in tackling the global issue of climate change.