Environmental, social, and governance, board gender diversity, and firm efficiency: Evidence from the global mining industry pre‐ and post‐COVID‐19 pandemic

Abstract

We examine (i) the impacts of environmental, social, and governance (ESG) on firm efficiency and (ii) how board gender diversity (BGD) moderates these impacts in mining multinational enterprises (MNCs). We first employ a two‐stage network data envelopment analysis (DEA) approach to estimate eco‐efficiency (EE) and profitability efficiency (PE), and a network‐based ranking model to rank the mining MNCs. Second, we utilize multivariate regression analysis on 294 firm‐year observations of 49 global MNCs spanning from 2016 to 2021 to achieve our research objectives. Based on our findings, it appears that mining MNCs have a bigger room for improvement when it comes to their profitability efficiency than their eco‐efficiency. The DEA average efficiency scores for EE and PE stand at around 83% and 50%, respectively. Moreover, our regression results reveal that ESG significantly and positively influences EE but insignificantly affects PE. Environmental pillar score (EPS), social pillar score (SPS), and governance pillar score insignificantly influence EE, whereas EPS and SPS significantly affect PE. In addition, BGD significantly moderates the effect of ESG on EE. BGD significantly moderates only the impact of SPS on PE. Overall, this study emphasizes the significance of focusing on BGD when examining the relationship between ESG and firm efficiency, which thus provides crucial insights for stakeholders in the global mining industry, including investors, policymakers, and researchers.