The impact of gender diversity on corporate carbon emissions: threshold effects and the role of the Paris Agreement

Abstract

Purpose This paper aims to investigate the impact of gender diversity on corporate carbon emissions, aiming to identify thresholds at which gender diversity becomes significant and to assess the consistency of this relationship in response to external shocks. Design/methodology/approach The study sample covers US Standard & Poor's 500 (S&P 500)-listed companies over the period 2011–2021. Panel threshold regression analysis is used to analyze data from multinational corporations, uncovering patterns and thresholds in the relationship between gender diversity and carbon emissions. Findings Empirical findings from this study suggest that companies with higher levels of gender diversity on their boards, in managerial positions and among employees tend to exhibit lower CO2 emissions. Specifically, the analysis identifies a critical threshold where the presence of women on the board significantly impacts CO2 emissions, highlighting the pivotal role of diversity across organizational levels in enhancing environmental performance. Moreover, firms with diverse boards experience reduced CO2 emissions following the adoption of policies aligned with the Paris Agreement and other global environmental agreements. These results are robust to endogeneity issues. Practical implications The findings highlight the importance of gender diversity in corporate governance and across organizational level and its implications for environmental sustainability. Companies seeking to promote diversity and sustainability can benefit from understanding the thresholds at which gender diversity becomes significant in reducing carbon emissions. Originality/value This study contributes to the literature by providing insights into the relationship between gender diversity and carbon emissions, offering valuable implications for corporate governance, environmental sustainability and diversity initiatives in organizations.