Silver-Haired, Carbon-Heavy? Director Age and Corporate Environmental Outcomes

Corporate boards play a pivotal role in shaping firms’ environmental strategies, yet the influence of board demographics, particularly director age, on sustainability outcomes remains insufficiently understood. This study investigates how the age profile of board members affects corporate environmental performance, including greenhouse gas emissions. Analyzing a comprehensive panel of 1843US publicly listed firms (17,218 firm-year observations) from 1996 to 2018, primarily through panel regressions with firm and year fixed effects, we find consistent evidence that firms with older boards tend to exhibit poorer environmental performance and higher direct, indirect and value chain greenhouse gas emissions. We argue that this relationship is driven by age-related differences in risk tolerance, time horizons, and sensitivity to environmental concerns. Additionally, the study explores moderating factors such as poor governance oversight (board co-option), pressure for profitability from institutional ownership, CEO social and environmental consciousness (CEO gender), and managerial ability, revealing that these governance dynamics significantly influence the strength of the director age–environmental performance link. The results, robust to endogeneity concerns, underscore the importance of considering age diversity and board refreshment in corporate governance to foster more effective environmental stewardship. These insights offer valuable implications for board members, corporate leaders, and policymakers aiming to advance sustainable business practices, but also open up opportunities for further exploration in alternative institutional contexts.