Achieving SDG 5 in the Boardroom: Gender Parity as the Critical Mass for Reducing ESG Decoupling

The global push for corporate sustainability has been accompanied by a persistent rise in ESG controversies, underscoring a widespread “say–do gap” between symbolic ESG commitments and substantive corporate conduct. Although board gender diversity is frequently promoted as a governance remedy, existing evidence largely assumes linear effects and offers limited insight into its role in mitigating ESG decoupling. This study investigates the nonlinear relationship between female board representation and ESG decoupling through the lens of Critical Mass Theory. Using a balanced panel of 2,161 firms across 42 economies over 2017–2023, we construct a novel ESG Decoupling Index based on the standardized divergence between ESG Scores and ESG Controversies Scores. The results reveal a robust U‐shaped relationship: ESG decoupling declines as female representation increases but rises again beyond an optimal threshold. The turning points are identified at approximately 3.2 female directors and, more notably, at a 55.48% female board share—approaching gender parity and far exceeding the conventional 30% benchmark. This pattern holds across developed and developing economies, with higher proportional thresholds in contexts with greater baseline diversity. The findings reframe effective board gender diversity as a matter of balanced power rather than token representation, offering policy‐relevant insights for achieving credible ESG integration and advancing the substantive objectives of Sustainable Development Goal 5.