Do female directors promote science-based emission-reduction targets?

This study investigates the impact of board gender diversity on the voluntary recognition of science-based emission-reduction targets (SBT) as a major tool of substantive corporate climate management. SBT refer to the aim of the Paris Climate Agreement to decrease global warming to below 2.0 degrees Celsius and preferably to 1.5 degrees Celsius. Grounded in the stakeholder agency, critical mass and upper-echelons theories, the panel includes 2,016 observations from 336 firms with headquarters in a European Union (EU) member state between 2016 and 2021. The results reveal that the ratio and critical mass of female directors, female non-executives and female members in the audit committee are positively related with SBT, while female CEOs show insignificant results. To the best of our knowledge, this is the first empirical study on the relationship between board gender diversity and SBT. The findings highlight the relevance of sustainable boards in achieving better carbon management practices.