Walk the Talk: ESG Mutual Fund Voting on Shareholder Proposals

45 Pages Posted: 23 May 2021

See all articles by Shane S. Dikolli

Shane S. Dikolli

Darden School of Business University of Virginia

Mary Margaret Frank

University of Virginia - Darden School of Business

Michael Zhe Guo

Boston University - Questrom School of Business

Luann J. Lynch

University of Virginia - Darden School of Business

Date Written: May 19, 2021

Abstract

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

Dikolli, Shane and Frank, Mary Margaret and Guo, Michael Zhe and Lynch, Luann J., Walk the Talk: ESG Mutual Fund Voting on Shareholder Proposals (May 19, 2021). Darden Business School Working Paper No. 3849762, Available at SSRN: https://ssrn.com/abstract=3849762 or http://dx.doi.org/10.2139/ssrn.3849762

Shane Dikolli (Contact Author)

Darden School of Business University of Virginia ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
4342431018 (Phone)

Mary Margaret Frank

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4432 (Phone)
434-243-5021 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/frank.htm

Michael Zhe Guo

Boston University - Questrom School of Business ( email )

United States

Luann J. Lynch

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

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