Climate Change and Mutual Fund Voting on Climate Proposals

61 Pages Posted: 1 Jan 2022 Last revised: 11 Mar 2024

See all articles by Alberta Di Giuli

Alberta Di Giuli

ESCP; European Corporate Governance Institute (ECGI)

Alexandre Garel

Audencia Business School

Roni Michaely

The University of Hong Kong; ECGI

Arthur Romec

Toulouse Business School

Date Written: January 1, 2024

Abstract

This paper explores whether investors’ personal experience with climate change affects
their voting behavior on climate-change-related proposals. We find that fund managers exposed to abnormally hot temperatures are significantly more likely to support
climate proposals. We further show that the effect is persistent. We observe significant heterogeneity in the effect of hot temperatures, depending on firm-level climate
risk, the quality of the proposals, fund investment strategy, and prior awareness of
climate change. Fund managers’ personal experience with climate change matters for
the outcome of climate proposals as it affects the aggregate support they receive. Fund
managers exposed to abnormally hot temperatures are also more likely to divest from
stocks with greater exposure to climate change.

Keywords: Climate Change, Shareholder Voting, Mutual Funds

JEL Classification: G30, Q54

Suggested Citation

Di Giuli, Alberta and Garel, Alexandre and Michaely, Roni and Romec, Arthur, Climate Change and Mutual Fund Voting on Climate Proposals (January 1, 2024). European Corporate Governance Institute – Finance Working Paper No. 815/2022, Available at SSRN: https://ssrn.com/abstract=3997730 or http://dx.doi.org/10.2139/ssrn.3997730

Alberta Di Giuli (Contact Author)

ESCP ( email )

Paris Campus
79, Avenue de la Republique
Paris, 75011
France

European Corporate Governance Institute (ECGI) ( email )

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

Alexandre Garel

Audencia Business School ( email )

8 Road Joneliere
BP 31222
Nantes Cedex 3, 44312
France

Roni Michaely

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China

ECGI ( email )

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

Arthur Romec

Toulouse Business School ( email )

20, bd Lascrosses
Toulouse, 31068
France

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