Does Gender Diversity Affect the Environmental Performance of Banks?

Round 1

Reviewer 1 Report

Review for Sustainability

Paper: Does gender diversity affect the environmental performance of banks?

 

Thanks for giving me the opportunity to read and review this manuscript. It is interesting, timely, and relevant and it contributes to the enormous literature of environmental performance. Overall, it is a very well-written paper. At the same time, revision is necessary.  The authors need to take into consideration my comments, which are mainly related to the motivation and some robustness checks. I present my comments in no specific order, though broadly speaking they follow the order of the paper itself.

 

1. Abstract.  Abstract is not engaging and does not state the main points of the paper. “Corporate social responsibility (CSR) has been … environmental performance and gender diversity”. This should not be part of the abstract but rather to the introduction. See for example the abstract of this paper:

Gulzar, M. A., Cherian, J., Hwang, J., Jiang, Y., & Sial, M. S. (2019). The impact of board gender diversity and foreign institutional investors on the corporate social responsibility (CSR) engagement of Chinese listed companies. Sustainability, 11(2), 307.

 

2.Introduction. Line 26. You have many statements such as: Available online: (site). All these should not be part of the main text, you may use footnotes. Please check all manuscript.

 

3.In-text citation. All over the document, you cite studies such as [1], [2] … This is fine, but in some cases, you do not have full-stop after the citation, or in other cases you display the name of the citation. Be consistent.

 

4. Introduction. Lines 61-64. You need to elaborate more on the channel between banks and environmental performance.

 

5. Continue from comment 4. Do really banks supervise the environmental performance of other firms? There is a lot of arbitrary information and irrelevant citations. Please check.

 

6. Introduction. Lines 83-86. You need to elaborate more on the contribution of the study. So, the only contribution is the sample? If yes, then you need to provide stronger motivation for the sample. It is not clear why banks? They do not pollute much compared to other industries. So, I am wondering why someone should focus on banks.

 

7. Literature. Lines 92-135. The empirical literature is fine; however, I would argue that your hypothesis does not have any theoretical justification. Is there any theory that connects environmental performance with gender diversity?

 

8. Section 3.2 Dependent variable. Lines 149-156. From the construction of the variable it seems that your topic is not environmental performance, but environmental disclosure. Please correct my if I am wrong, but if you are eventually measuring the environmental disclosure score, then all terms should change, including the title of your study.

 

9. Table 1. Line 161. What is the source of the gender diversity variables?

 

10. Line 193. Why did you only select one economic indicator for your model? What about other indicators that found significant in the literature; R&D, total assets, ROA etc.

 

11. Section 3.4 Method. There is significant time effect, which you have neglected. You should use time dummies in your regressions.

 

12. Table 4. Line 317. Your results are inconsistent. You find 2/7 variables significant. You should proceed with robustness checks in order to satisfy that results are not significant. You may (i) split the sample for America and EU banks, (ii) report the random effect results, (iii) include more control variables, (iv) trim the outliers, and/or (v) include GMM estimations to treat endogeneity concerns.

Author Response

Dear reviewer,

First of all, we would like to express our appreciation for your comments and suggestions.

To introduce the proposed changes, a double methodology has been used:

• A yellow highlighter was used to point out new phrases or words added to the original manuscript.
• Track changes was used to easily identify other changes in the document

Regarding your comments on the content of the article, we respond in the same order below, indicating the lines where the changes can be obsserved according to the manuscript in Word format:

• We have modified the abstract as indicated (lines 5 – 29). We have also referred to the recommended citation for this section (line 296).

Gulzar, M.A.; Cherian, J.; Hwang, J.; Jiang, Y.; Sial, M.S. The impact of board gender diversity 720 and foreign institutional investors on the Corporate Social Responsibility (CSR) engagement of 721 Chinese listed companies. Sustainability 2019, 11, 307. https://doi.org/10.3390/su11020307

 

• We have worked on the bank-environmental performance relationship, adding further information in this regard (lines 69-78 and lines 114-125).
• We have removed lines 86 – 88. This information referred exclusively to ethical banking, not to the general banking sector, which makes up the sample of the present study.
• The contributions of the study have been developed in greater depth (lines 111- 141).
• We have corrected the errors that appeared in the citations when the format of the text was modified from Word to PDF. Indirect citations should appear in the text as numbers: [1], [2] … However, when the citation is direct, the name or names of the author or authors should be mentioned, followed by the corresponding number of the citation. This practice can be observed in the articles published by the journal. This convention justifies why the direct cites are presented differently from the indirect ones.
• In reference to the comment about the existence of theories to support the gender diversity-environmental action relationship, we have cited three in Section 2 (lines 168 - 186).
• As in several previous studies, the dependent variable was considered as an environmental performance variable because it was constructed using metric variables that quantify issues such as total renewable energy used, as well as dichotomous variables (Boolean variables) that correspond to the adoption of a particular policy related to the environment, including whether or not the company uses renewable energy (Refinitiv, 2020).

Refinitiv (2020). Environmental, Social and Governance (ESG) scores from Refinitiv. Available on: https://www.refinitiv.com/content/dam/marketing/en_us/documents/methodology/esg-scores-methodology.pdf

• The gender variables were selected based on the literature review. For each of the variables, we indicate some of the studies that have also used that variable. Therefore, we feel we might not have understood exactly what the reviewer was referring to by the source of the variables, given that the sources are the articles that have used these variables, which are already cited in our paper.
• The reason why a single economic indicator was selected is as follows. Models with many variables often generate problems of multicollinearity. Therefore, we are forced to select certain control variables based on economic theory. In the gender diversity and business performance literature, the most widely used control variables form two groups: characteristics of the board of directors and characteristics of the company. The most commonly used variables from the latter group are those relating to the size of the company, usually measured in terms of the number of employees or total assets. Given that we are dealing with service sector companies, it seems more appropriate and representative of size to use the number of employees. Furthermore, in the testing, we found problems of multicollinearity when using the two measures in the model.
• Time dummies were included in the analysis to control for the unobservable factors that may influence the behavior of the dependent variable over time, as stated in the last sentence of Section 3.4 (line 328). However, as noted in the penultimate line of the footnote to Table 4, the presentation of time dummies was omitted for practical reasons, as per common procedure when presenting results (line 406 and 415).
• Following your indications, we provide a robustness analysis of the results by estimating a random effects model. We have added some text in the results section to present this new analysis (lines 445 – 455) and further improve the justification of the results (lines 428 – 433).

Best regards,

The authors

Reviewer 2 Report

This is an interesting paper; although I suggest doing a revision based on a few of my concerns around the content of the study:

First, the introduction should be more focused and better show the international importance of this study and its position on the international literature. In other words, it needs to highlight better what this paper brings new in the current literature.

Second, the reference list is quite scarce. Authors should improve it by mentioning some other works on CSR (Corporate Social Responsibility), see for instance a highly cited paper by Malovics et al 2008 published in the Journal of Socio-Economics 37 (3), 907-918. Another important CSR study based on developing countries is the chapter published by Visser Wayne in an Oxford handbook in 2008. Then, there are many connecting articles to environmental justice which authors should mention, please see an article in journal Cities, published in 2019 by Malovics Gyorgy et al, showing how socio-environmental justice is important in relation to empowerment of poor people. Also, when speaking about gender inequality and banks involvement in environmental issues, authors must mention that banks do not credit women and men in poverty, then the role of social capital is of major importance, see for instance a connection to this issue in an article by Mereine Berki et al 2017 published in Journal of Urban and Regional Analysis and another article of Malovics et al 2019 published in journal Area on poor people and how they are place attached even if they lack good environmental conditions.

Third, if the method and data interpretation is very good in this paper, conclusions are a bit short. A new paragraph should be added resuming other ideas from the findings.

Author Response

Dear reviewer,

First of all, we would like to express our appreciation for your comments and suggestions.

To introduce the proposed changes, a double methodology has been used:

• A yellow highlighter was used to point out new phrases or words added to the original manuscript.
• Track changes was used to easily identify other changes in the document

Regarding your comments on the content of the article, we respond in the same order below, indicating the lines where the changes can be obsserved according to the manuscript in Word format:

• The contributions of the study have been developed in greater detail (lines 111- 141).
• The study has been enriched by adding citations, including the studies mentioned by the reviewer, as shown on lines 48, 49 and 122.
• Following your indications, a new paragraph and some sentences have been added to the conclusions to reflect the implications of our findings (lines 473 – 475 and lines 479 – 489).

Best regards,

The authors

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Authors answered to all my comments, therefore I am happy to accept the paper.