The value impact of climate and non-climate environmental shareholder proposals

Henk Berkman; Jonathan Jona; Joshua Lodge; Joshua Shemesh

doi:10.1016/j.jcorpfin.2024.102653

The value impact of climate and non-climate environmental shareholder proposals

Henk Berkman, Jonathan Jona, Joshua Lodge, Joshua Shemesh

Banking & Finance

Research output: Contribution to journal › Article › Research › peer-review

2 Citations (Scopus)

Abstract

We study the value impact of environmental shareholder proposals (ESPs) for Russell 3000 firms from 2006 to 2021. We distinguish between climate-dedicated ESPs and non-climate ESPs covering other environmental topics. We use two approaches to evaluate management's ability and willingness to select value-enhancing ESPs and reject value-destroying ESPs: (i) cumulative abnormal returns around the final proxy filing date and (ii) a regression discontinuity design around the voting threshold at the annual general meeting. Our results suggest that management has screening ability for ESPs, especially for climate proposals, and that investors and managers share common objectives in environmental activism.

Original language	English
Article number	102653
Number of pages	21
Journal	Journal of Corporate Finance
Volume	89
DOIs	https://doi.org/10.1016/j.jcorpfin.2024.102653
Publication status	Published - Dec 2024

Keywords

Agency theory
Climate change
Environmental shareholder proposals
Proxy filing
Regression discontinuity

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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622365832-oaFinal published version, 1.84 MBLicence: CC BY

Cite this

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abstract = "We study the value impact of environmental shareholder proposals (ESPs) for Russell 3000 firms from 2006 to 2021. We distinguish between climate-dedicated ESPs and non-climate ESPs covering other environmental topics. We use two approaches to evaluate management's ability and willingness to select value-enhancing ESPs and reject value-destroying ESPs: (i) cumulative abnormal returns around the final proxy filing date and (ii) a regression discontinuity design around the voting threshold at the annual general meeting. Our results suggest that management has screening ability for ESPs, especially for climate proposals, and that investors and managers share common objectives in environmental activism.",

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AU - Berkman, Henk

AU - Jona, Jonathan

AU - Lodge, Joshua

AU - Shemesh, Joshua

PY - 2024/12

Y1 - 2024/12

N2 - We study the value impact of environmental shareholder proposals (ESPs) for Russell 3000 firms from 2006 to 2021. We distinguish between climate-dedicated ESPs and non-climate ESPs covering other environmental topics. We use two approaches to evaluate management's ability and willingness to select value-enhancing ESPs and reject value-destroying ESPs: (i) cumulative abnormal returns around the final proxy filing date and (ii) a regression discontinuity design around the voting threshold at the annual general meeting. Our results suggest that management has screening ability for ESPs, especially for climate proposals, and that investors and managers share common objectives in environmental activism.

AB - We study the value impact of environmental shareholder proposals (ESPs) for Russell 3000 firms from 2006 to 2021. We distinguish between climate-dedicated ESPs and non-climate ESPs covering other environmental topics. We use two approaches to evaluate management's ability and willingness to select value-enhancing ESPs and reject value-destroying ESPs: (i) cumulative abnormal returns around the final proxy filing date and (ii) a regression discontinuity design around the voting threshold at the annual general meeting. Our results suggest that management has screening ability for ESPs, especially for climate proposals, and that investors and managers share common objectives in environmental activism.

KW - Agency theory

KW - Climate change

KW - Environmental shareholder proposals

KW - Proxy filing

KW - Regression discontinuity

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DO - 10.1016/j.jcorpfin.2024.102653

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VL - 89

JO - Journal of Corporate Finance

JF - Journal of Corporate Finance

M1 - 102653

ER -

The value impact of climate and non-climate environmental shareholder proposals

Abstract

Keywords

UN SDGs

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