Gender diversity in bank boardrooms and green lending: evidence from euro area credit register data

We study whether female directors in banks’ boardrooms influence lending decisions toward less polluting firms. By using granular credit register data matched with information on firm-level greenhouse gas emission intensities, we isolate credit supply shifts and find that banks with more gender-diverse boards provide less credit to browner companies. This evidence is robust when we consider different types of emissions and control for endogeneity concerns. We also show that better-educated female directors grant lower credit volumes to more polluting firms. The “greening” effect of a greater female representation in banks’ boardrooms is stronger in countries with more female climate-oriented politicians.