The role of female leadership in firms’ environmental performance

This paper investigates the relationship between female leadership and firms’ environmental performance using data on 15,472 firms across 31 countries in Europe, Central Asia, and MENA from the World Bank Enterprise Surveys. Environmental performance is measured with the Firm Environmental Performance Index (FEPI). Using an instrumental variable approach based on the interaction between regional average female ownership and a law gender equity index, results show that firms led by women score, on average, around 0.28 points higher on FEPI than otherwise identical firms led by men. Therefore, policies promoting women’s leadership could help to mitigate the consequences of climate change.