Companies commit to more Sustainable Development Goals when women are in charge. Here are three reasons why.
by Valentin Kiefner
In the top league of the American corporate world, it is easier to find a CEO named James than it is to find a female CEO. In 2022, only 32 female CEOs led companies in the S&P500 – 6.4% of the total.
This imbalance is a problem for gender equality reasons. But it’s also bad news for sustainability more broadly. Large companies should lead the global transformation toward a sustainable future. Our research shows that’s more likely to happen when more woman are in the leadership team of a company.
With my colleagues Alexander Mohr and Christian Schumacher, I studied what qualities of firms’ top management teams (TMTs) support action on the Sustainable Development Goals (SDGs), the United Nations priorities for the future. We found that a larger share of women in upper management in major US companies has a particularly positive effect on companies’ implementation of the SDG framework.
Specifically, we find that increasing the share of females in the top management team by 13% would lead to an increase of SDGs supported from approximately one to seven.1 This implies a much broader and deeper integration of the SDGs in the corporate strategy when more female executives are present.
Our conclusions, recently published in the Journal of World Business, draw on the analysis of top management team characteristics and SDG commitments among firms in the S&P 500 during 2016-2019. We used multiple databases to understand TMT composition and used the Refinitv ESG database to identify the number of SDGs that companies aligned their business practices with each year.
Why do female executives make such a difference? In this article, I provide three reasons for their impact and share the story of one female CEO who’s already creating change.
3 Reasons Female Executives Increase Company Commitment to the SDGs
Our study shows that there’s a connection between women leaders and corporate SDG commitments, but due to its research design it doesn’t explain why. However, drawing on previous research and our theoretical framework, we identify three elements, which can explain our results. These are ways that female managers tend to differ from their male counterparts.
- Stronger ethics. Female managers tend to have higher ethical standards. Research shows that they are less willing to accept possibly unethical business practices. In considering an issue, they are more likely than men to think about issues of justice and about broad benefits. Many sustainability issues have ethical components, involving human rights and social justice.
- Greater stakeholder engagement. Sustainability and the SDGs are closely linked to a “stakeholder perspective”: paying attention to those who affect and are affected by company actions. Engaging stakeholders, whether NGOs or communities, can be challenging. But female leaders seem to have an advantage. Research shows that stakeholders are more likely to approach female executives. This may be because of society’s expectations of women: that they will be more receptive and more able to integrate sustainable business practices in corporate strategy.
- Influence on group decision making. Women’s presence improves organizational decision making. Research shows that when women join the C-Suite, top management teams become more oriented towards change and organizations become more innovative. These characteristics are certainly requirements for implementing the SDGs in corporate strategy.
How One Female CEO Advances the SDGs
The actions of Julie Sweet, the Chair and CEO of consultancy Accenture, show how women leaders make a difference in implementing sustainability frameworks in corporate strategy.
In the last two years, she established a partnership with United Nations Global Compact (UNGC), SAP and 3M in order to launch the “SDG Ambition” program. The program aims to help businesses accelerate their actions to achieve the SDGs by tracking performance and offering benchmarks to enhance impact.
Explaining her vision, Sweet commented: “We should have a lot of optimism, when you see how fast the world can change when you clearly articulate a purpose, when there’s a lot at stake.”
The “SDG Ambition” program enables companies worldwide. Sweet is also driving progress toward the SDGs at Accenture. The company aims to achieve gender equality by 2025, for example, and has already increased the share of women in their workforce from 36% to 44%. Sweet explained her approach: “We got there because we set the 50/50 goal, we had an execution plan, we measured our progress and we had accountable leaders.”
To Advance the SDGs, Advance Female Executives
We all recognize that achieving the SDGs is the key challenge of our time. The question is how to get there. After all, according to a 2019 study by the UNGC and Accenture, 71% of CEOs agree that business can play a critical role in the achievement of the SDGs — but only one in five corporate leaders believe that corporations are making a critical contribution.
Our study highlights the importance of increasing the share of female executives on multinationals’ TMTs as a way to increase companies’ support of the SDGs. Gender equality is an important goal in itself (SDG 5). But our findings suggest that gender equality on these teams may also help achieve other SDGs. Ultimately, all SDGs are linked, and gender equality may be the springboard for achieving a better world.
Read the Research
Kiefner, V., Mohr, A., & Schumacher, C. 2022. Female executives and multinationals’ support of the UN’s Sustainable Development Goals. Journal of World Business, 57(3).
About the Authors
Valentin Kiefner is Research and Teaching Associate at the Vienna University of Economics and Business, Austria. He currently pursues a PhD at the Institute for International Business. His research focuses on the interplay between International Business Strategy and Sustainability.
Alexander Mohr is Professor of Export Management and Internationalization Processes at the Vienna University of Economics and Business, Austria. His research interests include international strategic alliances, internationalization processes, non-market strategies as well as human resource management in multinational enterprises.
Christian Schumacher is Assistant Professor of Strategy and Innovation at the Copenhagen Business School. His research focuses on behavioral strategy and managerial decision-making in organizations and lies at the intersection of Organizational Theory and Strategy.