During the peak of the Covid pandemic, the global emissions of carbon dioxide (CO2) caused by human activity decreased by as much as 26% due to government enforced confinements. CO2 is one of the greenhouse gases causing global warming. These drastic reductions in environmental pollution have started a debate about how to build a more sustainable society once the Covid pandemic is behind us. I believe that one of the recent studies I have conducted with several colleagues provides an answer to how to build a more sustainable society.
The key finding from my study is that firms with female board members use more renewable energy than firms with male board members only. The study, which covers Standard & Poors 1500 firms from the USA over the period of 2008-2016, also finds that the combination of female directors on the board and the use of renewable energy creates shareholder value. This result is important as it makes the business case not only for sustainability but also for female board representation.
I believe that this is the first study on the link between female board directors and renewable energy consumption. The United Nations (UN) define renewable energy as energy stemming from biomass, small-scale hydro, solar, wind and waste sources. The shift of businesses from fossil or dirty energy to renewable or clean energy is an important step in reducing global climate change. The American Energy Protection Agency (EPA) estimates that in 2018 businesses were responsible for most greenhouse gas emissions in the USA. This means that global climate change cannot be tackled without substantial efforts made by businesses.
Why would female directors be more likely to promote the use of renewable energy than their male peers? First, women think about morality and ethics in terms of responsibilities. Such responsibilities include the duty to care for others as well as the duty to make the world a better place by tackling the challenges that society faces. In contrast, men tend to see morality and ethics in terms of their rights. For example, for men morality and ethics is about not interfering with the rights of others to live a fulfilled life. Second, men and women also differ in terms of how they help others. For women, helping others is typically about nurturing as well as providing help over the longer term. For men, helping behaviour normally consists of one-off and more short-term heroic interventions. As combatting climate change is a major societal challenge, which also requires actions over the longer term, one expects women to be more likely to take such actions.
What evidence is there that women care more about ethics and corporate social responsibility (CSR) than men?