Demystifying the influence of board gender diversity on the nexus between ESG performance and carbon emissions

This study examines the influence of Environmental, Social, and Governance (ESG) performance on corporate carbon emissions, specifically the moderating effect of board gender diversity. Utilizing panel data of 46 companies listed on the Saudi Stock Exchange during 2018–2022, the study uses a two-step system GMM to deal with endogeneity and unobserved heterogeneity. The results show that better ESG performance is significantly related to less carbon emissions, confirming that environmentally efficient behavior arises with better sustainability practices. Furthermore, gender-diverse boards reinforce this association, indicating that female representation improves a board’s supervisory role and accountability in ESG adoption. The findings of this study have important policy implications for corporate governance reforms and climate strategies in emerging economies, especially in the wake of Saudi Arabia’s Vision 2030 and Saudi Green Initiative.