What Drives Corporate Climate Progress? The Role of Sustainability Committees and Board Gender Diversity

ABSTRACT An increasing number of companies commit to the Science Based Targets initiative (SBTi) to validate their science‐based emission reduction targets (SBTs), yet it remains unclear whether these commitments translate into effective implementation. Against this background, this study examines how board‐level governance mechanisms influence corporate progress toward SBTs. Drawing on agency, resource dependence, and stakeholder theory, we analyze the effects of board gender diversity and sustainability committees using a cross‐sectional sample of 286 European firms with 586 validated near‐term SBTs. We estimate ordinary least squares models with lagged variables and conduct robustness checks addressing endogeneity using the Oster test and entropy balancing. Results reveal substantial variation in firms' progress and show that sustainability committees significantly enhance implementation, while board gender diversity has no measurable effect. The study advances understanding of governance drivers of SBT implementation and provides practical insights for firms, investors, and policymakers while highlighting avenues for future research.