The real effects of environmental activist investing
Subject
Finance, Finance
Publishing details
Social Sciences Research Network
Authors / Editors
Naaraayanan L; Sachdeva K; Sharma V
Biographies
Publication Year
2020
Abstract
We study the real effects of environmental activist investing. Using plant-level data, we find that targeted firms reduce their toxic releases, greenhouse gas emissions, and cancer-causing pollution. Improvements in air quality within a one-mile radius of targeted plants suggest potentially important externalities to local economies. These improvements come through increased capital expenditures on new abatement initiatives. We rule out alternative explanations of decline in production, reporting biases, and forms of selection, while also providing evidence supporting the external validity of environmental activism. Overall, our study suggests that engagements are an effective tool for long-term shareholders to address climate change risks.
Keywords
Activism; Environmental social and governance; Socially responsible investment; Corporate social responsibility; Pensions
Series Number
3483692
Series
Social Sciences Research Network