Do Salient Climatic Risks Affect Shareholder Voting?

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 perceptions of 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 investors’ climate-related risk preferences in altering their support for corporate environmental policies

Keywords: ESG, Shareholder Voting, Climate Change, Salience

JEL Classification: D72, G30, G41, Q54