firms with more gender-balanced boards are less likely to exaggerate their sustainability credentials, according to a 29 country study.
The research, which observed 3,902 firms from 29 countries over a fourteen-year period, found that companies with more female corporate leaders were less likely to exaggerate how positive their environmental impact is.
The study is particularly timely, given the growing importance of corporate environmental sustainability. Greenwashing, which is the practice of exaggerating or fabricating or exaggerating a company’s environmental credentials, can mislead customers and investors, making it difficult for companies to be held accountable for their environmental impact.
Researchers from the University of Portsmouth, Brunel University and Loughborough University looked at ESG decoupling data, which refers to the gap between what firms disclose about their ESG practices, and what their performance actually is.
Dr Ahmed Aboud, from the University of Portsmouth’s School of Accounting, Economics and Finance, said: “ESG decoupling is a major issue in the current corporate landscape, with many firms misrepresenting their actual ESG performance in their disclosures.
“Our study supports existing theories that women directors are crucial players in preventing this, as they are more likely to speak out against unethical behaviour, and support environmentally conscious decisions.”
Overall, the study provides valuable insights into the relationship between corporate leadership and environmental sustainability. As companies face increasing pressure to be transparent about their environmental impact, it is important to understand the factors that can contribute to more accurate and honest reporting.
What's Your Reaction?
