Executive Gender Diversity and Eco‐Innovation in Brazil: The Moderating Role of Sustainable Compensation Policies

Victor Daniel Vasconcelos and Maisa Souza de Ribeiro

Corporate Social Responsibility and Environmental Management, 2025, vol. 32, issue 5, 6066-6087

Abstract: This study investigates how executive gender diversity influences environmental innovation. It also explores the moderating role of sustainable compensation policies in this relationship. The sample of this study comprises 1035 observations of Brazilian firms from 2010 to 2023. The Feasible Generalized Least Squares (FGLS) econometric method was employed to test the two proposed hypotheses with data from the LSEG database. Besides, the two‐stage least squares method (2SLS) was used for the endogenous test. The results report that the presence of female executives has no impact on environmental innovation. Furthermore, the results reveal that sustainable compensation policy positively moderates the relationship between executive gender diversity and eco‐innovation. These findings suggest that compensation linked to environmental goals satisfies stakeholder demands for the adoption of environmentally friendly practices. The results indicate that policymakers should encourage regulations that incentivize sustainable compensation policies. Additionally, boards of directors should incorporate environmental criteria into executive compensation. Finally, investors should include sustainable compensation policies in their investment criteria, recognizing that they can encourage the implementation of eco‐innovative practices.

Date: 2025
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https://doi.org/10.1002/csr.70014

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:32:y:2025:i:5:p:6066-6087

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