Indore (Madhya Pradesh): A study by Indian Institute of Management Indore has found that women in leadership and ownership roles can significantly influence firms to adopt environmentally sustainable investment practices, especially when companies operate in innovative and supportive business environments.
The study, co-authored by Mohammad Azeem Khan and published in Business Strategy and the Environment, explores how female leadership affects corporate green investment practices (GIPs) across Central, Eastern and Southeastern European (CESEE) economies using data from the World Bank Enterprise Survey. The research comes at a time when businesses worldwide are facing growing pressure to address climate change and align with sustainability goals. According to the study, firms led or owned by women are more likely to embrace environmentally responsible practices, but the outcome depends heavily on access to resources, innovation capacity and institutional support.
Unlike earlier studies that focused primarily on boardroom representation, the IIM Indore research shifts attention to women in managerial and ownership positions, where key decisions on sustainability spending and resource allocation are actually implemented. Top managers and firm owners directly shape how sustainability strategies are executed within firms, the study notes, emphasizing that women leaders can have a stronger operational influence on green investment decisions than boards that mainly perform oversight roles.
The researchers classified green investment practices into capital-intensive and non-capital-intensive categories and used advanced statistical models to analyse firm behaviour. Their findings reveal a nuanced picture. In firms that lack innovation and face resource constraints, female leaders and owners often adopt a cautious wait-and-see approach, prioritising short-term stability over long-term green investments. However, in innovative firms, the situation changes dramatically.
The study found that innovation reduces uncertainty and increases strategic clarity, encouraging women leaders to view green investments not as risky long-term expenditures but as strategic business opportunities. In such environments, female leaders are more likely to translate socially responsible values into concrete environmental action. The research also highlights broader structural challenges faced by women-led firms in emerging and transition economies. Limited access to finance, weak institutional frameworks and regulatory hurdles can restrict the implementation of sustainability initiatives even when leadership is environmentally conscious.
To address these barriers, the study recommends policy measures such as targeted credit support, innovation-focused programmes, easier administrative processes and stronger long-term financing mechanisms. According to the researchers, such interventions could simultaneously advance gender equality and climate goals. The findings hold significance not only for European transition economies but also for emerging markets globally, including countries with similar institutional and financial constraints.
The study further suggests that gender diversity alone is insufficient to improve environmental outcomes. Instead, women leadership potential in sustainability must be supported through stronger innovation ecosystems and enabling policy frameworks. Researchers also acknowledged limitations in the available data, noting that future studies could benefit from more detailed indicators of green innovation intensity and broader measures of gender representation, including board-level participation. The paper opens new avenues for understanding how gender-balanced leadership can shape sustainable business practices in developing and transition economies amid increasing global climate concerns.
