Sustainability is no longer just an ethical choice—it’s a game-changer for business performance, and women are driving this transformation. According to Accenture, companies prioritizing robust ESG practices saw shareholder returns 2.6 times higher between 2013 and 2020¹. This success underscores how sustainable investments are now vital, driving not only environmental stewardship but also long-term financial resilience.
Studies show that female leadership plays a pivotal role in driving successful sustainability initiatives. Research from GreenBiz notes that 58 percent of sustainability executives in major companies are women5. Women are catalysts for implementing environmentally friendly and circular business models that integrate gender equity with climate action.
Safeguarding Stability Through Sustainable Investments
McKinsey’s report, Why ESG is here to stay, highlights that sustainable strategies can reduce capital costs by up to 10 percent and boost brand value by up to 30 percent2. In parallel, women-led organizations are more inclined to adopt a dual-lens approach that accounts for both ESG goals and the specific needs of underserved communities6. This dual approach enables climate action that builds resilient communities and advances social equity, which is vital for tackling systemic inequalities and strengthening long-term profitability. An example of this dual approach is seen in the 2X Challenge—a global initiative launched by development finance institutions (DFIs) in 2021.
By investing in clean energy projects that prioritize women’s roles, the initiative not only accelerated carbon reduction but also strengthened community resilience, highlighting the long-term environmental and economic gains driven by women’s involvement."
Stefania Biondino
MBA Student, Kogod School of Business
Additionally, the World Economic Forum warns that climate inaction could reduce the global economy by up to 18 percent by 2050, highlighting the urgency of sustainable investments as essential for both environmental and financial stability3.
The Impact of Gender Diversity in Circularity
Increasing gender diversity in leadership plays a transformative role in driving sustainable, circular business models. Studies by the Network for Business Sustainability link female representation on boards to improved problem-solving, enhanced social and environmental risk identification, and a stronger commitment to circular practices that reduce reliance on virgin resources, improve efficiency, and support long-term sustainability8. Building on this, research from García-Sánchez et al. (2023) demonstrates that companies with women in decision-making roles are not only more likely to adopt circular business models but also excel at reducing dependency on virgin resources and enhancing operational efficiency7.
The circular economy challenges the traditional “take-make-dispose” model8 as it prioritizes reducing waste, maximizing resource use, and extending the life cycle of products. Female leaders increasingly champion this approach to circular economy, with studies showing that female directors are more likely to prioritize environmental and social issues, resulting in better sustainable business outcomes. This effect is attributed to the cognitive diversity they bring to the boardroom, which enhances problem-solving, opportunity identification, and project exploitation9. Research also suggests that women's tendency toward care and well-being translates into a stronger focus on environmental and social issues7.
Specifically, the presence of female executive directors has been linked to significant progress in circularity initiatives. These leaders bring practical knowledge and experience from their roles, creating a spillover effect that enhances the organization’s overall performance in the circular economy7. This impact is most commonly seen in resource-dependent and environmentally focused industries, like manufacturing and energy7. For example, female leaders in energy companies often advocate for renewable energy investments, such as solar or wind. This initial push fosters a spillover effect, creating a company-wide culture that values sustainable production and circular business models.
There is a clear correlation between circular business models and the presence of women in decision-making positions. Research indicates that companies with higher levels of female leadership are more likely to adopt sustainable practices, reduce waste, and increase resource efficiency. In fact, analyzing 61,549 observations across 8,923 companies in 74 geographic areas found a strong correlation between female leadership and circular economy strategies. Women often bring unique perspectives, prioritizing long-term sustainability and ethical considerations, leading to innovative solutions and increased environmental awareness7.
When women ascend to leadership positions and advocate for these priorities, companies are not just meeting environmental mandates but setting themselves on the path towards building a valuable brand equity and long-term sustainability."
Stefania Biondino
MBA Student, Kogod School of Business
The shift towards a circular economy is not just good business sense, it is essential for our planet. Female leaders bring a well-rounded perspective and cognitive diversity which is fundamental in the process of transitioning to the circular economy. These are not just one-off environmental projects but ones that influence broader, systemic changes that shift the way business operates.
Embracing Gender Inclusive Leadership for a Sustainable Economy
As businesses pivot toward sustainable, circular models, the role of women in leadership is proving essential. By leveraging the unique strengths of gender diversity alongside a commitment to Environmental, Social, and Governance (ESG) factors, companies are positioning themselves not only for a greener future but for robust, inclusive growth that goes beyond traditional profit metrics.
This is more than a call to action—it's an invitation to reimagine the business paradigm. Are we sure we are not leaving value on the table if only 23 percent of executives and a mere 8 percent of CEOs are women? Without diverse voices at the top, organizations risk missing out on the proven financial and sustainability gains that inclusive leadership brings. It’s time to reflect on these dynamics and their impact on shareholder value and corporate resilience.
By championing gender diversity in the shift toward circularity, we can create lasting change that benefits both business and society. Will you join us?
References
1. Accenture, “Measuring sustainability. Creating value,” 2022, https://www.accenture.com/content/dam/accenture/final/a-com-migration/pdf/pdf-179/accenture-sustainability-measurement-report.pdf (accessed Nov. 10, 2024).
2. Sara Bernow, “Why ESG is here to stay,” McKinsey & Company, May 26, 2020, https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/why-esg-is-here-to-stay (accessed Nov. 10, 2024).
3. Swiss Re Institute, “The economics of climate change: no action not an option,” April 2021, https://www.swissre.com/media/press-release/nr-20210422-economics-of-climate-change-risks.html (accessed Nov. 10, 2024).
4. World Economic Forum, “Beyond Supply Chains: Empowering Responsible Value Chains,” Jan. 2015, https://www.weforum.org/publications/beyond-supply-chains-empowering-responsible-value-chains/ (accessed Nov. 10, 2024).
5. Institute of Sustainability Studies, “Enhancing women’s leadership in sustainable business planning,” Jan. 13, 2023, https://instituteofsustainabilitystudies.com/insights/guides/female-entrepreneurs-are-increasingly-dominating-the-sustainability-space/ (accessed Nov. 10, 2024).
6. Suzanna Biegal, “Why a Gender Lens Is Key to Sustainable Investing,” International Institute for Sustainable Development, May 5, 2021, https://www.iisd.org/articles/deep-dive/why-gender-lens-key-sustainable-investing (accessed Nov. 10, 2024).
7. Saudi-Yulieth Enciso-Alfaro, and Isabel-María García-Sánchez, “Are innovative firms more circular when women hold upper positions?,” Journal of Innovation & Knowledge Vol. 9 (2024).
8. Yewon Kim, “Waste Not, Want Not: A Circular Food Economy ”, Business Review at Berkeley, Feb 22 2024,
https://businessreview.studentorg.berkeley.edu/waste-not-want-not-a-circular-food-economy/ (accessed Nov. 10, 2024)
9. Alessandro Zattoni, et al., “Board diversity’s antecedents and consequences: A review and research agenda,” The Leadership Quarterly Vol. 34 (2023).
https://eca.unwomen.org/en/news/stories/2019/03/take-five-women-can-be-the-engines-and-souls-of-the-circular-economy
