The Eco Gender Gap in Boardrooms

Abstract

Using firm- and facility-level measures from 2002 to 2021, we show that having female directors leads to more environmental-friendly business operations. To establish the causal effect, we resort to plausibly exogenous variations in the share of female directors and a California law change. We show that neither board qualifications nor standard diversity measures supersede the share of female directors in explaining corporate environmental performance, suggesting that director gender is likely a holistic measure of female directors’ values and perspectives, and that female directors contribute to diversity of thought. Our findings highlight positive externalities among firms’ environmental, social, and governance engagement.

Keywords: female directors; boards; corporate environmental performance; pollution prevention; emissions; board gender quota

JEL Classification: G30; G38; G41