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Environmental Concern, Regulations and Board Diversity

Author

Listed:
  • Quynh Do
  • Ngan Duong Cao
  • Dimitrios Gounopoulos
  • David Newton
Abstract
Despite an increasing need for trustworthy ESG data and pressure from worldwide authorities to mandate climate disclosure, the Securities and Exchange Commission (SEC) has been sluggish to respond to the demand of investors for a more holistic approach. Our study demonstrates unique research setting in the context of local state implementation of the Regional Climate Action Plan Initiative (RAC). The empirical analysis reveals a positive correlation between RAC and environmental corporate social responsibility (CSR) for enterprises with a diverse board of directors, as defined by the Blau index. It indicates that a high-diversified board triggers an improvement in a firm’s environmental performance on average in the period following RAC. Additionally, we demonstrate that firms with a less diverse board of directors were more prone to over-invest in environmental CSR during the financial crisis. In general, this research illustrates the importance of factors other than market forces in determining ESG disclosure, such as local climate policy.

Suggested Citation

  • Quynh Do & Ngan Duong Cao & Dimitrios Gounopoulos & David Newton, 2023. "Environmental Concern, Regulations and Board Diversity," Review of Corporate Finance, now publishers, vol. 3(1-2), pages 99-148, May.
    • Handle: RePEc:now:jnlrcf:114.00000037
    DOI: 10.1561/114.00000037
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    Citations

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    Cited by:

    1. Zribi, Wissal & Boufateh, Talel & Guesmi, Khaled, 2023. "Climate uncertainty effects on bitcoin ecological footprint through cryptocurrency environmental attention," Finance Research Letters, Elsevier, vol. 58(PD).
    2. Barroso, Raúl & Duan, Tinghua & Guo, Siyue (Sarina) & Kowalewski, Oskar, 2024. "Board gender diversity reform and corporate carbon emissions," Journal of Corporate Finance, Elsevier, vol. 87(C).
    3. Akter, Maimuna & Cumming, Douglas & Ji, Shan, 2023. "Natural disasters and market manipulation," Journal of Banking & Finance, Elsevier, vol. 153(C).
    4. Akshita Arora & Khaoula Aliani, 2024. "Nexus between corporate environmental disclosures and gender diversity: Interaction effects of board independence," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1113-1128, February.
    5. Xu, Si & He, Xiaoyi & Xiong, Feng & Chen, Peiyao, 2024. "CEOs’ early-life famine experience and corporate donations: Evidence from the great Chinese famine," Economic Modelling, Elsevier, vol. 130(C).

    More about this item

    Keywords

    Diversity; regulatory impact; board of directors;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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