Gender Diversity is not just a buzzword; it’s the way of the future. Higher-performing organizations are diverse — and diversity begins at the top. Companies with gender-diverse executive management teams perform better but are they more likely to address climate change internally?

The paper published by IAE Paris- Sorbonne Business School on MDPI, “The Effect of Top Management Team Gender Diversity on Climate Change Management: An International Study,” looked at the effects of gender diversity on strategy development, risk management, and resource allocation. 

An international dataset of 836 companies from 16 developed countries in western Europe, North America, and Australia has been used to test four hypotheses about gender diversity and climate change management.

To address these research questions regarding climate change management practices and the presence of women on boards and top management teams. They used MERIT500 and CDP (Carbon Disclosure Project)- two specific and reliable databases of 836 firms from 16 developed countries.

The unique data of MERIT500 has been used to gather gender-specific information on companies to meet this need. MERIT500 database helped them monitor and collect updated information concerning the board, management, and executive management team of the most important companies in different countries.

What do they conclude?

Their research yielded mixed results. 

  1. The study noted that neither CEO sex nor the number of women on boards influenced any of the green management practices.
  2. Furthermore, they found that the gender of the COBs only influenced climate-related risk management processes. 
  3. Last but not least, they discovered that the feminization of managerial levels had an impact on climate change management. 

This could also explain the low number of women holding leadership positions. It could be inferred that these low percentages do not really allow gender diversity to produce significant effects until a still known critical mass has been reached according to the critical mass theory. For example, the CEO may be a woman, but if the majority of her managerial staff and board has a male majority, the impact of gender diversity cannot be expected to be positive.

What do we conclude?

After studying this report, we conclude, as they also mentioned, that the low percentage of women in leadership positions is the reason behind the lack of significance of the results. To determine whether the critical mass exists, future research will need to focus on the influence of gender diversity on management practices as a whole within top management teams. Furthermore, this call also calls for companies to diversify on executive levels beyond the boardroom.

The corporate world must take some action to mitigate climate change by reducing greenhouse gas emissions. The higher the gender diversity of top management teams, the better their climate change management. We believe that maintaining gender diversity at top levels sends a signal about the importance of climate change within the organization and other stakeholders.

Originally article published here

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