Review of Corporate Finance > Vol 3 > Issue 1–2

Environmental Concern, Regulations and Board Diversity

Quynh Do, School of Management, University of Bath, UK, , Ngan Duong Cao, School of Management, University of Bath, UK, , Dimitrios Gounopoulos, School of Management, University of Bath, UK, , David Newton, School of Management, University of Bath, UK,
Suggested Citation
Quynh Do, Ngan Duong Cao, Dimitrios Gounopoulos and David Newton (2023), "Environmental Concern, Regulations and Board Diversity", Review of Corporate Finance: Vol. 3: No. 1–2, pp 99-148.

Publication Date: 31 May 2023
© 2023 Q. Do, N. D. Cao, D. Gounopoulos and D. Newton
JEL Codes: M14, G34, G39
Diversityregulatory impactboard of directors


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In this article:
Environmental Concern and Regulations 
Identification Strategy 
Data and Summary Statistics 
Empirical Results 
Additional Analyses 
Conclusion, Limitations, and Remarks 


Despite an increasing need for trustworthy ESG data and pressure from worldwide authorities to mandate climate disclosure, the Securities and Exchange Commission (SEC) has been sluggish to respond to the demand of investors for a more holistic approach. Our study demonstrates unique research setting in the context of local state implementation of the Regional Climate Action Plan Initiative (RAC). The empirical analysis reveals a positive correlation between RAC and environmental corporate social responsibility (CSR) for enterprises with a diverse board of directors, as defined by the Blau index. It indicates that a high-diversified board triggers an improvement in a firm’s environmental performance on average in the period following RAC. Additionally, we demonstrate that firms with a less diverse board of directors were more prone to over-invest in environmental CSR during the financial crisis. In general, this research illustrates the importance of factors other than market forces in determining ESG disclosure, such as local climate policy.



Review of Corporate Finance, Volume 3, Issue 1-2 Special Issue on Gender Diversity in Corporate Finance: Articles Overiew
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