Abstract Reducing carbon emissions has become a critical imperative for firms seeking to maintain legitimacy and meet rising societal expectations. Grounded in institutional theory, critical mass theory and stakeholder theory, this study investigates the relationship between board gender diversity and firm-level carbon emission performance, with particular attention to the role of critical mass in enabling female directors’ influence. In addition, we examine whether stakeholder engagement and the presence of a dedicated CSR committee enhance the impact of female directors on greenhouse gas (GHG) emission reduction initiatives. Drawing on a panel dataset of Australian companies listed on the ASX between 2010 and 2023, we develop and empirically test hypotheses concerning the contributions of women on boards to strategic decision-making on carbon management and the extent to which stakeholder engagement and CSR committee structures might condition this relationship. Our results reveal that achieving a critical mass of female directors specifically, the presence of at least two women on the board is positively associated with stronger reductions in GHG emissions. However, female directors themselves constitute the primary driver of improved carbon performance; the relationship is significantly shaped by institutional context. Suggesting that the presence and influence of female directors themselves are contingent on high stakeholder engagement and the presence of a CSR committee. The findings also suggest that both stakeholder engagement intensity and the presence of a CSR committee function as contingent enabling governance mechanisms rather than traditional moderators. These mechanisms do not amplify the influence of female directors in a linear manner; instead, they establish the institutional and relational conditions necessary for female directors’ environmental preferences to translate into substantive reductions in carbon emissions once a critical mass is reached. The lack of interaction effects suggests that governance mechanisms operate as structural conditions rather than multiplicative moderators, highlighting the importance of moving beyond interaction-based models when examining board diversity outcomes. Overall, this study advances the literature on gender diversity and environmental sustainability by demonstrating that internal board gender composition plays a critical role in shaping carbon-reduction outcomes alongside external engagement practices and formal CSR governance structures. Therefore, this study shifts the theoretical conversation from whether female directors matter to when and under what governance conditions they are more effectively influencing firms’ environmental outcomes.