Board gender diversity and firm-level climate change exposure: A global perspective

•We test the link between board gender diversity and firm-level climate change exposure.•Firms with more gender-diverse boards exhibit lower climate change exposure.•The results hold for exposures to opportunity, physical, and regulatory shocks.•Boards with at least two female directors start having...

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Bibliographic Details
Published in:Finance research letters 2023-07, Vol.55, p.103995, Article 103995
Main Authors: Trinh, Vu Quang, Trinh, Hai Hong, Nguyen, Thi Hong Hanh, Vo, Xuan Vinh
Format: Article
Language:English
Subjects:
Board gender diversity
Climate change exposure
Critical mass theory
Environmental performance
Female directors
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Summary:•We test the link between board gender diversity and firm-level climate change exposure.•Firms with more gender-diverse boards exhibit lower climate change exposure.•The results hold for exposures to opportunity, physical, and regulatory shocks.•Boards with at least two female directors start having such a significant effect. This study examines the association between board gender diversity and firm-level climate change exposure. Using a global sample of 14,685 firm-year observations covering 2469 firms across 63 countries from 2000–2021, we find that firms with more gender-diverse boards are likely to exhibit lower climate change exposure. The results remain after we decompose the exposure into three components: exposures to opportunity, physical (e.g., sea level rises), and regulatory shocks (e.g., carbon taxes, cap and trade markets). Our critical mass analysis further confirms that boards with at least two female directors start having such a significant effect.
ISSN:1544-6123
1544-6131
DOI:10.1016/j.frl.2023.103995