Female board representation: a long-term strategy for leadership in economic-environmental efficiency and SDG integration

Purpose This study aims to examine how governance factors and environmental practices influence the economic-environmental efficiency of organizations, in both the short and long-term. Design/methodology/approach The analysis covers 3,483 observations from Brazilian firms listed on B3 between 2015 and 2022. The System Generalized Method of Moments (GMM-SYS) was employed to address endogeneity concerns. As an instrumental variable, the sectoral average of female board participation was used, calculated through the Leave-One-Out Mean approach. Findings The results indicate that gender diversity on boards exerts a positive effect, although only in the long run. Recycling activities are associated with persistent efficiency gains, whereas financial leverage negatively affects efficiency only in the short-term. ESG ratings, while initially correlated with higher efficiency, display a reverse effect over time. This pattern may suggest a misalignment between market signaling and actual environmental performance when robust governance mechanisms are absent. Practical implications From a social perspective, the results highlight the need for harmonized criteria and independent auditing, as well as the understanding that gender diversity policies require strategic patience. From a managerial standpoint, effective governance should convert institutional pressures into lasting, material actions, ensuring that investments, including leveraged ones, create value aligned with the SDGs. Originality/value The study’s originality lies in providing strong empirical support for Agency Theory and Institutional Theory, showing that the effects of governance structures and environmental practices on economic-environmental efficiency are contingent on the time horizon and on the materiality of actions. These findings have direct implications for SDGs 5, 9, 12, and 13.