GHG Emissions and Firm performance:The role of CEO Gender Socialization

In this paper, I examine the effect of corporate greenhouse gas emissions (GHG) on profitability. I use the gender composition of the CEOs' children as an identification strategy to investigate the impact of GHG emissions on profits. CEOs who father a daughter are associated with a 10% reduction in GHG emissions. The reduction in emissions, in turn, improves profitability. A one standard deviation decrease in GHG emissions leads to a 0.14 standard deviations increase in profitability. Examining the channels, I show that CEOs with daughters are more likely to adopt a climate-integrated business strategy and set emission-reduction targets. Emission reduction affects profitability through both information advantage (protection from negative industry shocks, and lower cost of capital), and operational efficiency (lower operating costs and energy consumption) channels