Board gender diversity, environmental innovation and corporate carbon emissions

•A negative relationship between board gender diversity and carbon emissions.•Environmental innovation amplifies the extent of this relationship.•Environmental innovation moderating effect is clearer for carbon-intensive firms.•Board diversity enhances better board effectiveness. This article investigates how the board diversity affects firms’ carbon emissions reduction and whether environmental innovation moderates this relationship. In addition, the moderating effect of environmental innovation in carbon-intensive versus non-carbon-intensive industries is also examined. Using data of the companies listed on the Standards & Poor's 500 index from 2002 to 2018, the 2SLS regression results indicate a statistically significant negative relationship between board gender diversity and carbon emissions. Environmental innovation amplifies the extent of this relationship. We find evidence that the moderation effect of environmental innovation is more pronounced for carbon-intensive firms than non-carbon-intensive firms. Our findings reinforce various corporate governance initiatives and public policy being undertaken all over the globe to encourage more gender diversity in the board of directors, demonstrating that board diversity enhances better board effectiveness in satisfying the needs of broader groups of stakeholders’ interests. The findings could be beneficial for stakeholders and regulators concerned with improving corporate governance mechanisms as well as reducing the carbon footprint.