This study aims to examine how governance factors and environmental practices influence the economic-environmental efficiency of organizations, in both the short and long-term.
The analysis covers 3,483 observations from Brazilian firms listed on B3 between 2015 and 2022. The System Generalized Method of Moments (GMM-SYS) was employed to address endogeneity concerns. As an instrumental variable, the sectoral average of female board participation was used, calculated through the Leave-One-Out Mean approach.
The results indicate that gender diversity on boards exerts a positive effect, although only in the long run. Recycling activities are associated with persistent efficiency gains, whereas financial leverage negatively affects efficiency only in the short-term. ESG ratings, while initially correlated with higher efficiency, display a reverse effect over time. This pattern may suggest a misalignment between market signaling and actual environmental performance when robust governance mechanisms are absent.
From a social perspective, the results highlight the need for harmonized criteria and independent auditing, as well as the understanding that gender diversity policies require strategic patience. From a managerial standpoint, effective governance should convert institutional pressures into lasting, material actions, ensuring that investments, including leveraged ones, create value aligned with the SDGs.
The study’s originality lies in providing strong empirical support for Agency Theory and Institutional Theory, showing that the effects of governance structures and environmental practices on economic-environmental efficiency are contingent on the time horizon and on the materiality of actions. These findings have direct implications for SDGs 5, 9, 12, and 13.
