Sustainable growth through strategic change: Women directors on European automotive boards and carbon performance

The gender diversity of corporate boards and other sustainability initiatives are topics of debate in today’s business landscape, especially in Europe. While the main theme of corporate sustainability is to achieve a balance between social, environmental, and economic goals, empirical research in carbon-intensive industries remains limited. Against this backdrop, this study examines the influence of board gender diversity of European automotive firms on their emissions-based carbon performance. Drawing on gender socialization and resource dependency theories, this study adopts a dynamic two-stage system generalized method of moments (GMM) model to analyze longitudinal data from 49 publicly listed firms during 2016–2023. The findings reveal a positive, though marginally significant link between board gender diversity and emissions-based carbon performance. Focusing on the automotive industry and employing a distinct emissions-based metric, this study addresses inconsistencies in past literature and emphasizes that the governance-carbon performance relationship is contingent on methodology and industry contexts. Overall, the finding contributes to the growing literature on governance and environmental sustainability and tentatively supports European legislative initiatives promoting women’s representation on boards. This study recommends increasing women’s participation on automotive boards and strategic committees, fostering external collaboration, and supporting the industry’s shift towards carbon neutrality by providing incentives and other funding.