Firm sustainable investment: Are female directors greener?

Are female directors greener than their male counterparts? We investigate this issue by examining the impact of female directors on firm sustainable investment. Using data of S&P 1500 indexed firms in the United States, covering the period 2004-2016, we find a positive relationship between female directors and sustainable investment. Consistent with critical mass theory, we also find that boards with two or more female directors have a pronounced impact on sustainable investment. Moreover, female independent directors have a stronger impact on sustainable investment than female executive directors. Our additional analysis shows higher value for firms with the presence of female directors and sustainable investment. Our findings are robust to alternative variable specification, estimation techniques, and different identification strategies including the two-stage least squares, generalized method of moments, and propensity score matching. The study provides novel evidence on the role of female directors in promoting sustainable investment and adds a new dimension to the ongoing debate in sustainability literature.