Cross‐National Diversity and Environmental Sustainability: Global Evidence and Organizational Mechanisms for Achieving the SDGs

This study investigates how cross‐national diversity within top management teams (TMTs) influences corporate environmental sustainability. Drawing on a large and globally representative panel dataset of 3798 publicly listed firms across 81 countries over an 18‐year period, we employ a multi‐method empirical strategy that integrates fixed‐effects panel regressions, a Difference‐in‐Differences (DiD) design, and an Instrumental Variables (IV) approach to address endogeneity and strengthen causal inference. We find that greater TMT cross‐national diversity is significantly associated with improved environmental performance, as evidenced by lower carbon emissions and reduced carbon intensity. Our analysis further demonstrates two key organizational mechanisms that contribute to this relationship: (1) increased adoption of sustainable operations and responsible supply chain practices, and (2) stronger institutionalization of environmental priorities via sustainability‐oriented governance structures. These findings underscore the strategic importance of leadership diversity in advancing environmental responsiveness and offer insights for firms and policymakers committed to achieving SDG 13 (Climate Action), SDG 12 (Responsible Consumption and Production), and SDG 16 (Peace, Justice, and Strong Institutions).