Greenhouse Gas Emission Disclosure and Firm Systematic Risk: How Leadership Gender Diversity Shapes the Impact

Abstract

The impact of greenhouse gas (GHG) emission disclosure on firm outcomes remains contested, highlighting the need to account for organizational contingencies when evaluating its effects. This study examines how leadership gender diversity—specifically board gender diversity and top management team gender diversity—moderates the relationship between GHG disclosure and firm systematic risk. Using a comprehensive panel of 6966 firm-year observations from 2010 to 2020 and applying robust estimation techniques, we identify gender diversity in leadership as a critical contingent factor. In particular, board gender diversity significantly moderates the GHG disclosure–risk relationship: firms with greater gender diversity in the boardroom experience a stronger risk-reducing effect from both core and extended GHG disclosures, whereas, firms with lower board gender diversity exhibit heightened systematic risk in response to disclosure. These findings contribute to the sustainability literature, resource dependence theory, and upper echelons theory by demonstrating that the impact of environmental disclosure is conditional on leadership composition. The study offers actionable insights for firms seeking to align ESG strategies with governance practices and for investors evaluating the credibility and risk-mitigating potential of corporate sustainability disclosures.