Asymmetric role of board diversity on green growth mechanism: Evidence from COP27 framework

Corporate governance has an ethical and legal obligation to safeguard environment from the effects of business operations. In this vein, our study examines the role of board diversity in green growth, renewable energy, social inclusion, and natural capital protection. A green growth index was created using indicators endorsed by the Global Green Growth Organization to accomplish the research objectives. For the 2012-2023, a panel of 451 US non-financial firms was selected from the S&P1500 index. The proposed hypotheses were tested using a fixed effect and quantile-based GMM. The MMQR findings suggest a potential non-linear relationship between diversity in the top management team and green growth. Moreover, a diverse workforce can also encourage environmentally friendly practices. Furthermore, renewable energy has been found to benefit from US board diversity. However, a diverse boardroom can harm social inclusion in the US. In addition, workforce diversity stimulates renewable energy use and social inclusion and protects US natural capital. The impact of board diversity on green growth, renewable energy use (SDG7), and natural capital protection can be amplified by enhancing the diversity of independent directors, gender diversity, and professionals from different backgrounds. Diversity in the workforce and boardrooms is imperative to renewable energy, social inclusion and the protection of natural capital. In the US-listed firms, their marginal impact should be improved.