This study explores the impact of female leadership on Environmental, Social, and Governance (ESG) performance in small and medium-sized enterprises (SMEs) in Bosnia and Herzegovina, a transitional economy. While prior research shows that gender-diverse boards improve corporate social responsibility (CSR) and ESG outcomes, most studies focus on large firms in developed markets. This study fills that gap by analyzing data from 131 SMEs that applied to the 2024 SDG Business Pioneers Award. Using descriptive statistics and correlation analysis, the research examines how women’s representation in management affects ESG priorities. Findings indicate a positive association between higher female participation and improved outcomes in ethics, innovation, productivity, and inclusivity. Companies with at least one-third women in leadership show stronger commitment to balanced and sustainable governance. In contrast, environmental practices are widely adopted across firms but appear less dependent on leadership composition. The study provides the first empirical evidence from Bosnia and Herzegovina on the gender–ESG link. It contributes to global debates on diversity and sustainability while offering practical insights for policymakers and managers. Promoting gender-inclusive leadership can enhance competitiveness, resilience, and alignment with international sustainability frameworks.

Gender diversity and the inclusion of women in leadership roles are increasingly recognized as critical drivers of organizational equity and sustainability, particularly through their influence on workforce diversity, employee development, and fair compensation practices. While these effects are well-documented in developed economies, evidence from transitional contexts remains limited. This study explores the impact of female leadership on the social dimension of Environmental, Social, and Governance (ESG) performance in private sector companies in Bosnia and Herzegovina. Focusing on three key outcome areas—inclusive hiring, investment in employee training, and average employee compensation—it examines whether a higher share of women in decision-making positions correlates with stronger ESG-related practices. Using original data from 131 firms that applied for the 2024 United Nations Development Programme’s SDG Business Pioneers Award, the analysis reveals a positive association between female leadership and all three outcome variables. These findings suggest that gender-inclusive leadership contributes meaningfully to socially responsible business practices, even in transitional economies. By providing empirical insights from Bosnia and Herzegovina, this study adds to the growing body of research on gender and sustainability. It highlights the potential of female leadership as a lever for advancing ESG goals and offers practical implications for policymakers and corporate actors aiming to align business strategy with inclusive and sustainable development.