Gender diversity and water scarcity: Estimating water use in large companies

Abstract

Insufficient water availability is a concern for corporate and government management. In Latin America, some large companies have reported environmental statistics, which allows for the evaluation of their actions and results regarding water use for production. Greater participation of women in corporate decision-making has been identified as having served to increase efficiency and reduce water use. The aim of this article is to explain changes in water use in companies from two perspectives: 1) by measuring the influence of women on boards of directors, and 2) by estimating the effect of regional water conditions, which, if worsened, would foster changes in business practices. These approaches allowed us to validate how gender diversity in companies contributed to reducing water use and also to match firms' self-reported water figures with the region's water conditions. The sample consisted of 29 companies (87 observations) listed on the Mexican Stock Exchange and was estimated using a system of equations with data from 2017, 2020, and 2023. The variables came from business reports and government indicators on concessions, bans, and water quality. It was found that incorporating the region's water conditions into the analysis increases the level of water stewardship promoted by women executives. These findings contribute to the design of sustainable strategies and provide evidence on adaptive efforts due to water degradation.