Gender Equity and Carbon Emissions: The Role of Female Managers
By Yener Altunbas and Giulio Velliscig | May 5, 2022
As women leaders at the 2021 COP26 summit highlighted, unsustainable environmental decisions amplify gender inequality. Women disproportionately bear the brunt of the consequences of climate related change. If effectively involved in the environmental decision-making process, women managers in industrialized economies can help slow the rate of corporate carbon emissions.
In our recently published paper, we find that gender equality in business management could help combat climate change by lessening carbon emissions. We studied gender representation in companies in developed countries in order to examine whether the presence of women in leadership mitigated carbon emissions. We collected data for around 2,000 listed companies in 24 industrialized economies over the period 2009–19. We found that a 1% increase in female managers within a firm is associated with a 0.5% decrease in carbon emissions. Our study also reveals that, after the Paris Agreement, firms with greater gender diversity reduced their CO2 emissions by about 5% more than firms with more male managers. Female managers appear to play a fundamental role in the implementation of climate-oriented policies, such as the Paris Agreement, by echoing their prescriptions within the firm and improving environmental results. In other words, a greater representation of women in business management in developed economies has the potential to curb carbon emissions.
Women Managers and Environmental Decisions
What explains female managers positive record of environmental decision-making? According to previous research on business management, women are less overconfident and more risk-averse than men; they are less likely to underestimate the repercussions of their decision on the environment and overestimate their ability to provide adequate solutions. Some scholars suggest that women bring a different ethical framework to environmental objectives (Burkhardt et al., 2020). Due to this ethical framework, women are less inclined to endorse policies that are detrimental for the environment. Studies also suggest that women tend to be more compassionate and caring than men due to their greater responsibilities for child and domestic care. Women often play a greater role in reproducing society. On a corporate level, this means considering the interests of all stakeholders rather than simply bending to financial interests. Women may bring a greener attitude to environmental objectives in the workplace and promote business environmental responsibility.
Focusing on female managers adds a new understanding to current debates about female participation in climate-related decisions.
Focusing on female managers adds a new understanding to current debates about female participation in climate-related decisions. Prior studies have extensively focused on female directors, but our research finds that female managers may provide a different and unique contribution. Female directors usually face barriers to voicing their opinions and being heard, especially when they do not reach the critical mass of 30% of board participants. Female managers often have wide discretion about how to meet the board’s strategy, therefore, they can effectively express their green attitude through eco-friendly implementation strategies.
We also investigate the barriers or incentives that culture, religion, and institutional characteristics may have on the way female managers drive CO2 emissions reductions. We find that, rather than cultural or religious beliefs, it is the inclusion in leading positions within society that emerges as a key factor affecting female managers’ ability to reduce CO2 emissions. As women gain greater representation in government and civil society organizations, female managers are better able to value their green attitude at work. Culture, instead, does not influence the green attitude of female managers in the workplace as our results are unaffected by the historical predominance of a hierarchical and patriarchal division of labor and power within the family of certain countries, where males are breadwinners and females are caregivers. Similarly, religion does not affect the female managers’ contribution in reducing carbon emissions.
Our work offers an important perspective to the current political conversations about women’s leadership against climate change. Corporations in developed countries have a responsibility to combat global warming and promoting women to management positions may be one strategy. Gender equity in business could be an effective route to achieve environmental results, like the reduction of carbon emissions, as female managers are more likely to deploy greener implementations strategies and build a consistent environmental awareness within the firm. For these reasons, we encourage policymakers to complement climate policies with gender clauses promoting a greater engagement of female managers in achieving firms’ environmental objectives. This would represent significant progress for the inclusion of women in the environmental decision-making process as prescribed by the Paris Agreement.
Gender equity in business could be an effective route to achieve environmental results, like the reduction of carbon emissions, as female managers are more likely to deploy greener implementations strategies and build a consistent environmental awareness within the firm.
COP26 participating countries have agreed to strengthen the pledges on CO2 emissions reductions so to try to keep temperature rises within 1.5°C, namely the threshold indicated by scientists to prevent climate disasters. Organizations in developed countries are called upon to do their part given their contribute to global disparities in carbon emissions. Wealthier nations, indeed, are responsible for half of all historical CO2 emissions. As climate advocates argued at COP26, women are leaders in the response to the crisis. A greater participation of female managers could improve environmental outcomes and help fight climate change.