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GHG emissions and firm performance: The role of CEO gender socialization

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  • Homroy, Swarnodeep

Abstract

In this paper, I examine the effect of corporate greenhouse gas emissions (GHG) on profitability. I use the gender composition of the CEOs' children as an identification strategy to investigate the impact of GHG emissions on profits. CEOs who father a daughter are associated with a 10% reduction in GHG emissions. The reduction in emissions, in turn, improves profitability. A one standard deviation decrease in GHG emissions leads to a 0.14 standard deviations increase in profitability. Examining the channels, I show that CEOs with daughters are more likely to adopt a climate-integrated business strategy and set emission-reduction targets. Emission reduction affects profitability through both information advantage (protection from negative industry shocks, and lower cost of capital), and operational efficiency (lower operating costs and energy consumption) channels.

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  • Homroy, Swarnodeep, 2023. "GHG emissions and firm performance: The role of CEO gender socialization," Journal of Banking & Finance, Elsevier, vol. 148(C).
    • Handle: RePEc:eee:jbfina:v:148:y:2023:i:c:s0378426622003016
    DOI: 10.1016/j.jbankfin.2022.106721
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