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Do Salient Climate Risks Affect Shareholder Voting?
Journal article   Open access   Peer reviewed

Do Salient Climate Risks Affect Shareholder Voting?

Eliezer Fich and Guosong Xu
Review of Finance, v 29(2), pp 567-602
01 Mar 2025
url
https://doi.org/10.1093/rof/rfaf003View
Published, Version of Record (VoR) Open CC BY-NC-ND V3.0

Abstract

Climate Climate, Natural Disasters and Their Management, Global Warming (Q54) Environment Firm Firm Behavior: Empirical Analysis (D22) Firm Performance: Size, Diversification, and Scope (L25) Firms Institutional Investors Natural Disaster Pension Funds, Non-bank Financial Institutions, Financial Instruments, Institutional Investors (G23) Pollution Control Adoption and Costs, Distributional Effects, Employment Effects (Q52) Climate Change
Institutional investors affected by hurricanes subsequently support environmental proposals in non-affected firms even if they never voted for similar initiatives. Affected investors raise their holdings in firms where their pro-environment votes are consequential. The increased voting support after hurricanes has real effects as environmental proposals endorsed by more hurricane-afflicted investors are more likely to pass. Moreover, both market capitalization and analysts' recommendations decline after firms pass environmental proposals. Our evidence suggests that natural disasters raise institutional investors' concerns about the environment and about potential fund flow disruptions. These concerns, in turn, influence environmental activism, corporate policies, and firm performance.

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UN Sustainable Development Goals (SDGs)

This publication has contributed to the advancement of the following goals:

#9 Industry, Innovation and Infrastructure

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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Business, Finance
Economics
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