Do salient climatic risks affect shareholder voting?

50 Pages Posted: 2 Aug 2021 Last revised: 7 Jan 2025

See all articles by Eliezer M. Fich

Eliezer M. Fich

Drexel University - Department of Finance; European Corporate Governance Institute (ECGI)

Guosong Xu

Rotterdam School of Management, Erasmus University

Date Written: January 03, 2025

Abstract

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. 

Keywords: Shareholder voting, Hurricanes, Risk perception, Salience

Suggested Citation

Fich, Eliezer M. and Xu, Guosong, Do salient climatic risks affect shareholder voting? (January 03, 2025). Proceedings of Paris December 2021 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: https://ssrn.com/abstract=3895071 or http://dx.doi.org/10.2139/ssrn.3895071

Eliezer M. Fich

Drexel University - Department of Finance ( email )

LeBow College of Business
3220 Market Street – 11th Floor
Philadelphia, PA 19104
(215) 895-2304 (Phone)

HOME PAGE: http://https://sites.google.com/view/eliezerfich

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Guosong Xu (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

RSM Erasmus University
PO Box 1738
Rotterdam, 3062 PA
Netherlands

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