How Private Shareholder Engagements on Material ESG Issues Affect Companies

Investors are increasingly engaging with companies about their impact on the environment and society. This seems to be bearing fruit, as shown by a study conducted by Maastricht University. The researchers compared the results of companies where engagement took place with those where it did not. In 2021, for example, 20 percent of U.S. environmental and social shareholder proposals won over 50 percent of shareholder support, while in 2016 only 3 percent of such proposals were approved by a majority of shareholders. 

Investors have also strengthened their private engagement efforts, with collaborative groups like Climate Action 100+ urging firms to make their operations more environmentally sustainable. Yet an important question persists: How relevant are these stewardship activities to the financial performance of target firms?

In a new working paper, Rob Bauer, Jeroen Derwall and Colin Tissen, economist at Maastricht University, use an extensive global sample of private environmental, social, and governance (ESG) engagements to answer this question.

Read more in the CLS Blue Sky Blog


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