Do Salient Climatic Risks Affect Shareholder Voting?

Posted: 2 Aug 2021

See all articles by Eliezer M. Fich

Eliezer M. Fich

Drexel University - Department of Finance

Guosong Xu

Rotterdam School of Management, Erasmus University

Date Written: June 21, 2021

Abstract

Shareholders in locations recently hit by hurricanes significantly increase their support for environmental proposals even if they never previously voted for similar initiatives. Our results show that changed beliefs about salient climate risks rather than firms’ fundamentals drive the increased support. More favorable voting following a hurricane strike has real consequences: Climate-related proposals are more likely to pass, and when they do, firm performance weakens. These findings highlight the role of investor psychology in altering shareholders’ perceptions about climate risks and, consequently, their support for corporate environmental policies.

Keywords: ESG, Shareholder Voting, Climate Change, Salience

JEL Classification: D72, G30, G41, Q54

Suggested Citation

Fich, Eliezer M. and Xu, Guosong, Do Salient Climatic Risks Affect Shareholder Voting? (June 21, 2021). Available at SSRN: https://ssrn.com/abstract=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)

Guosong Xu (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

Rotterdam
Netherlands

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