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Firm-level ESG performance and climate risk: Role of gender-diverse boards

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Listed:
  • Bhattacherjee, Purba
  • Mishra, Sibanjan

Abstract

This study investigates how board gender diversity (BGD) influences the firms’ environmental, social, and governance (ESG) performance and their vulnerability to transitional (TR) and physical (PR) climate risks. The study sample comprise of 9,128 firms across 91 countries from 2015 to 2023. The key findings reveal that the moderating effects of BGD vary by risk type: BGD improves (diminishes) ESG performance in response to TRs (PRs). The study indicates that BGD prioritize long-term sustainability disclosures during transitional periods, while focusing on short-term operational resilience amid physical interruptions. Channel analysis confirms that BGD shapes firms’ view of ESG disclosure, where it acts as a favourable market signal during TRs, while liquidity assurance gains significance under PRs to maintain firm value. Furthermore, the effects of BGD are more relevant in emerging economies and institutional environments characterized by weaker governance and stronger cultural constraints. This study offers novel insights and practical implications.

Suggested Citation

  • Bhattacherjee, Purba & Mishra, Sibanjan, 2026. "Firm-level ESG performance and climate risk: Role of gender-diverse boards," Finance Research Letters, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:finlet:v:96:y:2026:i:c:s1544612326002394
    DOI: 10.1016/j.frl.2026.109708
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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