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Do salient climatic risks affect shareholder voting?
Journal article   Open access   Peer reviewed

Do salient climatic risks affect shareholder voting?

Eliezer M Fich and Guosong Xu
Review of Finance, v 29(2), pp 567-602
16 Jan 2025
url
https://doi.org/10.1093/rof/rfaf003View
Published, Version of Record (VoR) Open

Abstract

shareholder voting risk perception salience behavioral bias D72 D91 G41 Q54 Hurricanes
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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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Business, Finance
Economics
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