From risk aversion to sustainability: How women directors influence investment in the energy firms?

• Board gender differences (gender socialization) are analyzed across energy firms worldwide. • Women directors have no significant effect on investment in overall energy firms. • Women directors are positively associated with investment in renewable energy firms. • A critical mass (i.e., at least 30 %) of women directors is required to enhance investment in renewable energy firms. • Though seen as risk averse, women directors' focus on ethics and sustainability drives sustainable investment. The energy sector faces growing pressure for a green transition, yet its capital-intensive nature requires significant investment. The role of women directors, known for their ethical yet risk-averse approach, in driving such investment remains unclear. This study examines data from 567 global energy firms (2002–2022) from the LSEG database to explore the link between women directors and investment expenditure. The regression results indicate that while the women directors do not significantly impact overall investment, they do positively influence sustainable investment, i.e. investment in renewable energy firms. These findings remain robust across alternative measures and estimation methods, including IV-2SLS and GMM. Additionally, this study confirms that a critical mass of at least 30 % women directors is essential to influence sustainable investment expenditure. Overall, the study provides valuable insights into gender socialization and also suggests that increasing women's representation on boards is key to promoting sustainable corporate investment.