Does diversity among directors affect corporate climate change behaviour? Evidence from Japan

ABSTRACT

This paper examines how female and foreign corporate directors influence their corporation’s climate change behaviour. This study found that female directors contribute to the formulation of their company’s climate change vision, and foreign directors contribute to the formulation of a climate change mission. Japan has set a long-term goal of reducing greenhouse gas emissions to net zero by 2050, an extremely difficult goal to achieve. Our results suggest that it is important to appoint female and foreign directors to achieve net zero emissions. Our results also suggest that diversity among company directors needs to be further expanded.

KEYWORDS:

• Climate change
• diversity
• director
• Japan

JEL CLASSIFICATION:

• G34
• L21
• M14
• Q54

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ We requested company representatives in charge of the business strategy for climate change to fill out the questionnaire. One third of respondents belonged to the business strategy department, one third was from the environment strategy section, and one third was from the CSR section and public relations.

² The sample size of financial and director’s data is 133, but there was one company that did not respond to ClimateMission and ClimateVision in the survey.

³ In the discrete choice model, an ordered logit model or a multinomial logit model is used when the objective variable has three or more choices. If choices are ordered, the ordered logit model is used, and if choices are unordered, the multinomial logit model is used.

Additional information

Funding

This research was supported by the Japan Society for the Promotion of Science Grant Numbers 20H04395, 22K01701