When we think about women and climate change, the usual narrative goes something like this: Climate change will take a greater toll on the poor than on the rich. Women are more likely to be poor. Women will suffer more as the globe warms than will men. That’s all true.

But increasingly, the narrative about gender and climate focuses on women’s role in developing solutions to climate change.

Solutions are something we urgently need for this crisis, which threatens us like none we’ve encountered before. We need to address climate change on two fronts:

  1. avoiding the unmanageable (mitigating greenhouse gas emissions to avoid a climate catastrophe) and
  2. managing the unavoidable (adapting to a climate that has already changed and will continue to do so)

This will take a lot of work and investment, and an increasing number of studies suggest that teams with more gender diversity are better equipped to do this work effectively.

Gender-diverse boards and the CDP

Two studies have shown that more gender-diverse boards of directors are significantly more likely to respond to the annual Carbon Disclosure Project (CDP) questionnaire that asks companies to report their emissions, climate risks and opportunities, and the degree to which they are managing those risks and investing in decarbonization or resilience opportunities. One of those studies looked at all CDP responders across 33 countries1, and one2 looked only at India; both found that companies with more gender-diverse boards were more likely to report to the CDP. Both studies comport with another3 that found a positive association between the gender diversity of company audit committees and ESG reporting generally. 

Companies that respond to the CDP questionnaire show that they are attuned to the risks and opportunities that climate change presents to their businesses and are motivated to be part of the solutions. Whether a company responds to the questionnaire signals to its many shareholders its willingness to reduce its climate risks, capitalize on its opportunities and become more fortified against changing climate, which can make it a more resilient company. This type of reporting is important for another reason: We need to thoroughly understand what climate risks are at the global, national, state, provincial, municipal, company, village, farm, and individual level to reduce them.

The female CEO differentiator

We also need to commit to action on both the climate mitigation and adaptation fronts. Here, too, gender diversity has a role to play. A 2019 study4 found that firms with female CEOs have lower air, water and greenhouse gas (GHG) emissions than their peers and receive fewer environmental penalties. That study also helped reinforce the initial correlation by noting that toxic emissions were reduced when the CEO transitioned from male to female. That reinforces an earlier paper5 from UC Berkeley that found companies with more women in the upper echelons of decision-making were more likely to invest in renewable power generation; integrate climate change effects into developing products designed to help customers manage climate risks; measure and manage GHG emissions in the company and its value chain; and otherwise create solutions to manage and reduce environmental risks.

Another paper noted that companies with more gender-diverse boards are less often sued for environmental problems, and that is also true of companies with women CEOs, when those companies lack gender diversity on the board.6

Gender diversity and innovation

There’s also a connection between gender diversity — and other forms of diversity — and innovation, and we need an abundance of innovation to solve the challenges that climate change presents. We can do a lot to reduce emissions now, with current technologies, but there are also emerging technologies that are not yet ready for economic prime time that could be real game changers in mitigation. We can get a lot better at storing electricity, something that would amplify the benefits and possibilities of renewable energy. We can decarbonize our transit system — something that’s already well underway in the automotive industry but is only beginning in shipping, rail and air transport. While we already know how to use batteries as power trains, there are probably roles for fuel cells, non-fossil fuel propulsion in shipping, electrification of roads to charge EVs while driving, and green hydrogen fuels. There are efforts underway to capture carbon dioxide from the atmosphere and sequester or reuse it in ways that reduce atmospheric concentrations of greenhouse gases. All these developments and others need a lot of innovation effort — and a lot of investment — before they can be truly successful.

There’s a diversity angle to all this innovation. Gender-diverse research and development teams tend to have better innovative capacity7, as well as innovation efficiency, that is, the ability to generate new product sales per unit of R&D investment.8 One study9 looked at more than 4,000 companies and found that more gender‑diverse workforces “lend themselves to radical innovation, which causes a paradigm shift by the introduction of new features, resulting in the emergence of completely new markets.” That is precisely what we need — new markets for zero-carbon solutions.

“Gender-diverse research and development teams tend to have better innovative capacity as well as innovation efficiency, that is, the ability to generate new product sales per unit of R&D investment.”

Companies with more gender-diverse boards have been shown to have more patents and more novel patents.10 Moreover, companies with more gender-diverse boards also tend to have cultures that are more tolerant of failure and tend to provide long‑term performance incentives. Both these elements are essential to the business of innovating in the private sector. While it may sound odd to extol failure tolerance as a virtue, it is useful to remember that innovation is something we don’t know how to do if the only thing that is tolerated is success. Thomas Edison is reputed to have said, “I have not failed. I’ve just found 10,000 ways that won’t work.” Any company that demands that every innovative effort be rewarded with a commercial product is not a good candidate for survival. Having a board that understands that innovation involves much trial and error is a positive attribute.

In the long run, of course, an infinite capacity for tolerating failure is not a winning strategy. Failure is just a step along the road to successful innovation, and understanding the role of failure, again, is associated with diversity. Boston Consulting Group found that companies with more diverse leadership teams tend to have higher proportions of revenue attributable to innovation11.

Diversity: better for climate, equality

Climate change presents us with the kind of problem that humanity has proven, over millennia, to be poor at solving. Read Jared Diamond’s book “Collapse,” or Richard Conniff’s article “When Civilizations Collapse,” or Naomi Oreskes and Erik M. Conway’s “The Collapse of Western Civilization: A View From the Future,” and it is apparent that solving problems that require discernment of threatening long-term trends or present-day actions to avoid impacts generations into the future, or those that present obstacles that living people have never experienced, is something humans absolutely have not mastered. While applying more diversity to climate solutions might not be enough to save us from ourselves, it seems it could point us in a better direction. 

Climate change is one of greatest problems that humanity faces, but another of our grand challenges is inequality. Solving both problems will make just about every other issue we face easier to deal with. We don’t need to treat them as two distinct things; there is solid evidence that diversity and inclusion not only addresses the problems of inequality but can help us deal with climate change as well. By investing in entities that understand the importance of gender diversity, investors will be part of the solution to both.

1. Mohammed Hossain, Omar Al Farooque, Mahmood Ahmed Momin, Obaid Almotairy, “Women in the Boardroom and Their Impact on Climate Change-Related Disclosure,” Social Responsibility Journal, Oct. 2, 2017.

2. B. Charumathi and Habeebu Rahman, “Do Women on Boards Influence Climate Change Disclosures to CDP? Evidence from Large Indian Companies,” Australasian Accounting Business and Finance Journal, 2019.

3. Francisco Bravo and Nuria Reguera-Alvarado, “Sustainable Development Disclosure: Environmental, Social, and Governance Reporting and Gender Diversity in the Audit Committee,” Wiley Online Library, Dec. 11, 2018.

4. Zigan Wang and Luping Yu, “Are Firms with Female CEOs More Environmentally Friendly?” March 24, 2019.

5. Kellie A. McElhaney and Sanaz Mobasseri, “Women Create a Sustainable Future,” UC Berkeley Haas School of Business, Oct. 2012.

6. Chelsea Liu, “Are Women Greener? Corporate Gender Diversity and Environmental Violations,” Journal of Corporate Finance 52, October 2019.

7. Julia Schneider and Verena Eckl, “The Difference Makes a Difference: Team Diversity and Innovative Capacity,” OECD, July 29, 2016.

8. Liqun Xie, Jieyu Zhou, Qingqing Zong and Qian Lu, “Gender Diversity in R&D Teams and Innovation Efficiency: Role of the Innovation Context,” Research Policy(49:1), February 2020.

9. Alexa Roscoe, “Women and Innovation: Making the Connection,” Stanford Social Innovation Review, April 4, 2016.

10. Dale Griffin, Kai Li, Ting Xu, “Board Gender Diversity and Corporate Innovation: International Evidence,” Sept. 25, 2019.

11. Rocio Lorenzo, Nicole Voigt, Miki Tsusaka, Matt Krentz, and Katie Abouzahr, “How Diverse Leadership Teams Boost Innovation,” Boston Consulting Group, Jan. 23, 2018.

Julie Gorte, Ph.D.

Senior Vice President for Sustainable Investing

Julie is a leading figure in Impax Asset Management’s sustainable investing work, coordinating systemic engagement and the financial implications of integrating sustainability into investment decision-making. Julie researches the connections between sustainability and economic performance. She also tracks and develops insights into the impact of public policy on investment and communicates with public policymakers to help make public policy more favourable to sustainability and sustainable investing. Julie is a member of our Gender Analytics team and the Impax Sustainability Centre.

Prior to joining the firm, Julie headed up the social investment strategy at Calvert. She has held senior roles at the Congressional Office of Technology Assessment, The Wilderness Society, and the Environmental Protection Agency.

Julie serves on the boards of the Endangered Species Coalition, E4theFuture, Clean Production Action, the Forum for Sustainable and Responsible Investment (US SIF) and is the board chair of the Sustainable Investments Institute. She holds a Ph.D. and a master’s degree in resource economics from Michigan State University and has a bachelor’s degree in forest management from Northern Arizona University.

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