Walk the Talk: ESG Mutual Fund Voting on Shareholder Proposals
45 Pages Posted: 23 May 2021
Date Written: May 19, 2021
We document evidence that mutual funds designated as “Sustainable Investment Overall” by Morningstar (which we classify as ESG mutual funds) are no more likely than other mutual funds to support shareholder proposals. We find, however, that ESG mutual funds are more likely than non-ESG mutual funds to support environmental and social (ES) shareholder proposals. We also find that ESG mutual fund support for ES proposals is more pronounced in ESG index funds than in ESG active funds and in the ESG funds of small rather than large fund families. These results imply that mutual fund investment constraints and access to investor demand may shape how ESG mutual funds influence portfolio firms’ environmental and social action choices.
Keywords: ESG, Mutual funds, Sustainability, Shareholder proposals, Proxy voting
JEL Classification: G23, G30, M14
Suggested Citation: Suggested Citation