The Role of ESG Performance in Reducing Occupational Accidents: The Moderating Effect of Board Diversity

ABSTRACT Although prior research on environmental, social, and governance (ESG) performance has primarily examined financial and reputational outcomes, its impact on internal operational outcomes remains underexplored. This study investigates the relationship between ESG performance and occupational accidents, emphasizing the moderating role of board diversity. The analysis utilizes a sample of Taiwanese firms that publicly report occupational accident data, specifically the disabling injury frequency rate. To address potential sample selection bias, the study employs propensity score matching. Board diversity is measured using a multidimensional framework that captures six distinct board attributes. To correct for estimation bias associated with a limited sample size, the study applies the bootstrapping method. The regression results reveal a significantly negative association between ESG performance and occupational accidents. This relationship is more pronounced in firms with more diverse boards, suggesting that diverse boards may strengthen the impact of ESG initiatives on workplace safety. To address endogeneity, the study employs the generalized method of moments and two‐stage least squares approaches. The findings are robust across industry risk profiles, subsample periods, and alternative ESG measures. These results offer important implications for corporate governance and sustainability, highlighting their joint role in fostering safer work environments.