This is the second article in our BCG BrightHouse blog series about Environmental and Social Impact. The authors would like to acknowledge and thank Emily Zeller for her support in the development of this publication.
The climate crisis is more than an environmental emergency – it is also a social crisis amplifying existing inequities. Effectively tackling the crisis requires us to embrace gender inclusivity. To achieve lasting, global change, we need to mobilize the business community through the active and equitable engagement of all people. Research supports this solution, showing a strong correlation between representation of female leadership in organizations and positive impact on their green transformation efforts. Given that the green transformation of businesses plays a crucial role in global climate action, a straightforward yet often overlooked solution to the climate crisis lies in promoting more women into leadership roles.
Mitigating the climate crisis is also a gender equity case.
Women bear the brunt of the climate crisis. They are disproportionately affected by most (if not all) challenges outlined in the UN’s Sustainable Development Goals. Given their societal role as primary caregivers, women are the first to experience the impacts of the climate crisis.
Women and their children comprise approximately 80% of those displaced due to climate-related disasters worldwide. As acute droughts and other consequences of climate change have undermined food security and general safety for individuals worldwide, these events disproportionately affect women.
Beyond the direct impacts, the ripple effects of the climate crisis send additional, unforeseen shock waves causing impacts on women that men do not experience. An example of this phenomenon can be found in the rising cost of feminine hygiene products — the byproduct of a chain reaction initiated by warming global temperatures that affect crop commodities worldwide, triggering the widespread increase in cotton prices in developing and developed countries alike.
Women suffer disproportionate harm from the impact of the climate crisis, so how can we leverage women’s unique positioning in climate action?
Viewing climate action through a gender-equity lens accelerates progress.
Women have consistently proven themselves as formidable forces driving positive change in the realm of environmental leadership. Icons like Gro Harlem Brundtland and Jane Goodall have put female leaders at the forefront of environmental progress Their inspiring and pioneering leadership has proved vital to forging a fair and sustainable path forward for our planet. The decisive role of women in shaping the sustainability agenda is an often-neglected factor in the climate debate. That´s an interesting fact because research indicates that businesses with women in leadership roles prioritize climate crisis mitigation and adaptation, accelerating the transition towards sustainable practices.
Corporations with greater female board representation demonstrate better environmental performance, more comprehensive environmental reporting, and more proactive green strategies.
These firms are more inclined to adopt eco-friendly policies, invest in renewable energy, and focus on energy efficiency. Corporations with greater female board representation demonstrate better environmental performance, more comprehensive environmental reporting, and more proactive green strategies. BCG indicates that greater gender diversity could boost global GDP by almost 2% while reducing global emissions by 1.5 gigatons per year — more than the current annual global emissions of the whole aviation industry. Other evidence indicates that female CEOs are associated with a significant (19%) increase in organizational sustainability scores.
Women’s propensity for risk awareness and long-term strategic thinking is vital in guiding corporate strategies towards more sustainable business models. Women tend to reap greater rewards than men for altruistic behavior, such as an increased concern and care of others. While men are often socialized to be more autonomous, competitive, and individualistic, women are typically socialized to be more collaborative, communicative, and collective in their thinking. This context undergirds women’s heightened awareness of and concern about the links between environmental harm and personal well-being, often greater than that of their male counterparts. A report by the UN established a positive correlation between a higher percentage of women on corporate boards and the open reporting of carbon emission information. The link between female leadership and increased transparency and communication around climate impact underlines the need for tackling climate protection by placing more women in leadership roles.
Female representation on boards is not only pivotal for the sake of meeting organizations’ climate goals but also for their general success, as innovation, productivity, and overall economic growth are boosted. Data supports the correlation between increased female representation in business leadership and superior profitability — including improved financial returns, greater ethical compliance, and reduced fraud. The best way to meet climate goals and boost profit is to put more women in charge.
Research suggests a critical mass of at least 30% women in board membership is necessary to influence a board’s policies and decisions related to sustainability performance. And yet, despite the positive impact ascribed to women holding leadership positions, we have begun to approach this 30% threshold only in recent years, and we have a long road ahead of us to close the parity gap.
A recent BCG study found that a minority of boards fully integrate sustainability into their companies’ strategies. Women’s notable underrepresentation in the green economy is exacerbated by gender biases, and their limited presence in STEM fields creates a significant barrier to accessing green roles. Positioning women at the forefront of the green transition is thus not merely a matter of equity — it’s a strategic imperative with immense, untapped potential for scaling sustainable practices and policies.
Positioning women at the forefront of the green transition is not a matter of equity — it’s a strategic imperative.
In the high-stakes game of global climate stabilization, two obstacles appear before us. There are still too few women in leadership positions, and the business world is off track on decarbonization. From where we stand, what are the specific implications for businesses?
Tackling female leadership representation and the climate crisis together is the most effective approach.
Instead of addressing climate protection and an increase in female leadership as two separate objectives, an integrative approach to tackling both objectives can lead to the most effective outcomes. Within the discourse of gender equity and the climate crisis, combining climate protection with the economic empowerment of women engages a frequently overlooked lever to unlocking impact.
Historically, the narrative about gender and sustainability has focused on how women are particularly susceptible to the climate crisis, not on how female leadership can accelerate climate mitigation and adaptation. Rewriting the narrative to place more women in leadership, especially to address the climate crisis, holds several key benefits.
First, in our current economic environment, the rise of shareholder influence has driven a prioritization of short-term profitability over long-term growth and sustainability. However, female leaders tend to emphasize multi-stakeholder interests and long-term orientation, integrating the interests of multiple stakeholders as well as the shareholders themselves. In the context of climate protection, which requires long-term vision and sustainable investment, elevating women in leadership and involving them in mitigation plans offers a critical unlock.
Second, research has found that women excel as leaders in crisis situations. This became particularly apparent during the Covid-19 pandemic, when case numbers and death tolls were systemically lower in countries led by women. Further, a large-scale study conducted by Harvard Business Review during the pandemic found that women were rated more positively on leadership effectiveness than men. Women were also rated more positively on 13 out of 19 leadership competencies. Including taking initiative, building relationships, decision making, driving for results, and establishing goals. This trend continued after the pandemic, and subsequent studies have echoed the findings: female leaders demonstrated a greater awareness of their followers’ potential fears, a genuine concern for wellbeing, and a higher confidence in their plans. With the climate crisis accelerating in urgency toward potential catastrophe (evidenced by 2023’s status as the hottest year on record), putting more women in leadership positions offers a springboard for effectively tackling this crisis.
Investigating the relationship from a different perspective, it can be argued that the climate crisis could drive more women into leadership roles. This can be explained with the help of the “glass cliff” phenomenon, which is based on the idea that women are more likely to rise to organizational leadership positions in times of crisis or downturn, often so late in the game that they are practically doomed to fail. But there is good news on the other side of this no-win situation. This initially problematic phenomenon can engender a positive result with more female leaders being called to the forefront of tackling the climate crisis. A holistic approach that invites women into climate action leadership roles before the organizations are in this state of crisis replaces this no-win situation with a win-win — an increase in female leadership simultaneous with climate crisis mitigation.
Nevertheless, once female leaders are in positions of power, they leave these same positions at a significantly higher rate than their male counterparts. For every one woman promoted, two leave their companies. It is therefore crucial to better understand how to promote women to leadership roles in the climate protection context without them leaving these positions shortly after. So, what should businesses do?
Sustainability and female leadership, once peripheral topics in boardrooms, are emerging as core components of long-term business viability. Both topics now occupy center stage in board discussions. Moving forward, we have an important opportunity to blend the topics seamlessly with overarching business strategies. As seen in the digital transformation or recently in Climate and Sustainability or Diversity, Equity, and Inclusion efforts, the probability of success is much higher if those goals are interlinked with an organization’s core strategic roadmap.
Empowering women in professional settings necessitates a holistic approach that addresses both structural and cultural elements within organizations. The same holds true as businesses pivot toward green transformation. An inclusive work culture is foundational, and the synergy of diversity in executive positions becomes even more critical. To harness the full potential of the green transformation through strong female representation in executive positions, both employees and leadership teams must wholeheartedly embrace the change.
Unlocking organizational impact requires taking a leap.
Securing and sustaining women in leadership roles calls for a foundational shift. Our approach to an inclusive and sustainability-focused, high-performance culture involves four steps.
Discover: We explore how organizations fulfill their “need in the world”. Through that, we guide the development of a “climate-action narrative” of an inclusive target culture that simultaneously promotes female leadership. We also identify and assess existing culture and behaviors to understand what the organization does well and what is getting in the way. As part of this step, we also assess specific organizational contexts (Leadership and Change, Organizational Design, Structures and Processes, and Talent and Skills).
Articulate: We define the three or four key and actionable behaviors of leaders (from C-Suite to frontlines) that matter most for green transformation as well as for supporting female leadership. We root these behaviors in an inspirational purpose statement and narrative that inspire personal and organizational change in the desired directions. We also map the “physics” of the organization to design a robust, cascading activation roadmap.
Activate: We introduce bold commitments and KPIs for both objectives. We drive and inspire emotional engagement through strong, tangible communication. And we build leader capabilities and adapt rhythms and green routines from both the top (executives) down and the bottom (frontline leaders) up.
Embed: We revise ways of working across processes, tools, and structures (e.g., performance management systems or operating models) to reinforce intertwined targets for female leadership and concrete climate action. We also measure success continuously and adapt accordingly.
This detailed roadmap takes us through holistic stakeholder mobilization that leads to a successful transformation. Every layer of the organization, from entry-level to the executive suite, must align in recognizing and valuing the unique strengths that women bring to leadership roles and climate action. Achieving this alignment requires a tangible and actionable plan communicated transparently to all stakeholders.
The imperative of the issue is clear — and so is the solution.
Tackling the climate crisis and the gender gap in leadership simultaneously offers a unique and influential opportunity for businesses to create a more sustainable and equitable future. The interconnectedness of these challenges demands integrated solutions that address both environmental and social issues. By fostering diverse and inclusive leadership, businesses can harness a wide range of perspectives and ideas to drive innovative and environmentally responsible practices. Embracing this holistic approach not only enhances climate action but also strengthens resilience, competitiveness, and long-term success in the ever-evolving global landscape. Transforming our values and intention into action is the way forward.
This is the second article in our BCG BrightHouse blog series about Environmental and Social Impact. Creative Design by Chiara Zardi, Designer at BCG BrightHouse