Does gender diversity matter? Female directors and firm carbon emissions in Japan

Abstract

Research on the impact of corporate board diversity on corporate governance for corporate sustainability development is on the rise. However, studies on the effects of gender diversity on corporate environmental performance are limited to traditional corporate social responsibility reports, disclosures, and ratings. This study, instead, explores such effects, focusing on overall carbon emissions. It employs a novel dataset compiled based on direct overall carbon emissions at the firm level in Japan. Accordingly, firms with female outside directors are more likely to have lower carbon emissions. By contrast, abatement effects are muted if women are appointed as inside directors. The findings are robust to several identification strategies employed to address potential endogeneity issues. The policy implications encourage corporations to strengthen sustainability performance from the governance perspective.