Private Shareholder Engagements on Material ESG Issues

Rob Bauer; Jeroen Derwall; Colin Tissen

doi:10.1080/0015198X.2023.2220648

Private Shareholder Engagements on Material ESG Issues

Rob Bauer, Jeroen Derwall, Colin Tissen

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

Abstract

We study private shareholder engagements with 2,465 listed firms about environmental, social, and governance (ESG) issues from 2007 to 2020. We examine the extent to which private engagements address financially material ESG issues and contribute to firm performance. We find that material engagements succeed more often than immaterial engagements and that the targets of successful material engagements significantly outperform their peers by 2.5% over the next 14 months. Further, we find that material engagements are more often associated with improvements in profitability and cost ratios than immaterial engagements. Finally, our evidence indicates that a decrease in CO₂e emission intensity accompanies environmental engagements.

Original language	English
Pages (from-to)	64-95
Number of pages	32
Journal	Financial Analysts Journal
Volume	79
Issue number	4
DOIs	https://doi.org/10.1080/0015198X.2023.2220648
Publication status	Published - 2 Oct 2023

Bibliographical note

Publisher Copyright:
© 2023 The Author(s). Published with license by Taylor & Francis Group, LLC.

Funding

We obtained financial support from Columbia Threadneedle Investments UK International Limited for hiring the research assistants, who are affiliated with Maastricht University. Maastricht University licenses the SASB Standards.

Keywords

ESG
corporate sustainability
materiality
shareholder engagement

UN SDGs

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

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10.1080/0015198X.2023.2220648Licence: CC BY-NC-ND

Private Shareholder Engagements on Material ESG IssuesFinal published version, 1.69 MBLicence: CC BY-NC-ND

Cite this

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title = "Private Shareholder Engagements on Material ESG Issues",

abstract = "We study private shareholder engagements with 2,465 listed firms about environmental, social, and governance (ESG) issues from 2007 to 2020. We examine the extent to which private engagements address financially material ESG issues and contribute to firm performance. We find that material engagements succeed more often than immaterial engagements and that the targets of successful material engagements significantly outperform their peers by 2.5% over the next 14 months. Further, we find that material engagements are more often associated with improvements in profitability and cost ratios than immaterial engagements. Finally, our evidence indicates that a decrease in CO2e emission intensity accompanies environmental engagements.",

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N2 - We study private shareholder engagements with 2,465 listed firms about environmental, social, and governance (ESG) issues from 2007 to 2020. We examine the extent to which private engagements address financially material ESG issues and contribute to firm performance. We find that material engagements succeed more often than immaterial engagements and that the targets of successful material engagements significantly outperform their peers by 2.5% over the next 14 months. Further, we find that material engagements are more often associated with improvements in profitability and cost ratios than immaterial engagements. Finally, our evidence indicates that a decrease in CO2e emission intensity accompanies environmental engagements.

AB - We study private shareholder engagements with 2,465 listed firms about environmental, social, and governance (ESG) issues from 2007 to 2020. We examine the extent to which private engagements address financially material ESG issues and contribute to firm performance. We find that material engagements succeed more often than immaterial engagements and that the targets of successful material engagements significantly outperform their peers by 2.5% over the next 14 months. Further, we find that material engagements are more often associated with improvements in profitability and cost ratios than immaterial engagements. Finally, our evidence indicates that a decrease in CO2e emission intensity accompanies environmental engagements.

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Private Shareholder Engagements on Material ESG Issues

Abstract

Bibliographical note

Funding

Keywords

UN SDGs

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