Abstract
This study examines the effects of gender diversity, board independence and incentive-based mechanisms on biodiversity initiatives among 256 non-financial UK firms covering a period from 2002 to 2014. We use fixed effect and logit regression models to analyse overall biodiversity protection initiatives (BPI index) and individual biodiversity indicators. We find gender diversity and environmental-social-governance (ESG)-based compensation policy having positive associations with biodiversity initiatives of a firm, a finding that supports the prediction of the stakeholder theory. We also find that performance-related-pay (PRP) policy and the level of executive compensation have positive associations with BPI, although their relationships with individual biodiversity indicators remain inconclusive. Whilst ESG-based compensation policy seems supportive of a firm’s sustainable environmental strategies, incentive-based mechanisms appear to influence executive management to enhance environmental legitimacy by highlighting biodiversity policies and processes, rather than demonstrating actual biodiversity performance of a firm.
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