Are women more risk-averse in ESG investments and leading to financial distress? An Indian bank evidence

Purpose Gender diversity (GD) has been the topic of attention in recent years in the corporate board structure. The purpose of this study is to find out about the effect of ESG investment on financial distress (FD) using GD as a moderator. GD is the ratio of males and females in the board structure. Design/methodology/approach This study uses the time dimension from 2010 to 2023 with cross-sectional units consisting of 22 Indian banks. Panel data analysis is used to evaluate these results. Findings The significant outcome of this research include that there is no significant association among ESG and FD. But when moderator GD comes into play, this study finds that the greater concentration of men on the board leads to a rise in ESG activities and improves the financial health. Also, more concentration of women on the board leads to a fall in the ESG activities in banks, which degrades financial health. Research limitations/implications This study’s outcomes apply to the gender board composition of Indian banks because it only examined the banks of the Indian banking sector. Practical implications This study provides information for practitioners, stakeholders, academics and interested in maximising board composition for improved financial health and ESG results, it has valuable ramifications. Originality/value Previous studies have not reported any findings on the association among GD, FD and ESG performance in Indian banks. This research addresses this gap and contributes to the prior literature by examining the effect of ESG on FD by using GD as a moderator between them.