Climate change and innovation: Exploring the mediating role of gender equality at the firm level

Based on an empirical evaluation of hypotheses derived from a novel theoretical framework linking environmental policies, gender equality and innovation, using globally comparable firm-level data we find that: (i) there is a positive correlation between firm-level gender equality and innovation; and (ii) the direct relationship between greenhouse gas emissions and innovation is ambiguous, varying across different measures. However, stricter environmental policies consistently promote innovation, and this effect extends beyond the conventional Porter Hypothesis. Both the depth (measured by policy stringency) and breadth (quantified through resource-based environmental policies) significantly enhance organizational gender equality, which in turn fosters innovation. While this relationship is less pronounced in developing countries, we find a statistically significant environment–gender nexus that positively moderates the link between environmental policy and innovation. This finding aligns with the idea that resource-focused policies play a key role in triggering an additional induced innovation channel linked to women’s empowerment.