Relationship between top management team diversity and ESG performance in freight transport multinationals in the context of EU sustainability reporting

This study explores the impact of top management team (TMT) diversity on Environmental, Social, and Governance (ESG) performance in multinational freight transport companies, particularly in the context of the European Union’s Corporate Sustainability Reporting Directive (CSRD). Recognizing ESG as a critical indicator of corporate resilience and societal value, we investigate how diverse TMTs contribute to more comprehensive and innovative ESG strategies. Through case studies of 13 leading freight companies across steamship lines, freight forwarders, and removal firms, we analyze the relationship between various dimensions of TMT diversity and ESG outcomes. Our findings are contextualized within the evolving EU regulatory landscape, with special attention to the CSRD and the Directive on Gender Diversity, which are transforming ESG from a voluntary to a mandatory corporate practice. The research highlights that board diversity, especially in social and governance dimensions, is positively associated with enhanced ESG performance. Furthermore, we project that the implementation of new EU legislation will stimulate greater diversity within top management, driving further improvements in ESG practices. These insights underscore the strategic importance of fostering diverse leadership teams to meet rising regulatory expectations and to achieve sustainable business transformation in the freight transport sector.