Do Institutional Investors Vote Responsibly?

48 Pages Posted: 1 Mar 2022 Last revised: 13 Apr 2022

See all articles by Anne Lafarre

Anne Lafarre

Tilburg Law School, Private Business and Labour Law Department, TILEC

Date Written: February 16, 2022


Existing research and practical evidence highly question whether institutional investor truly walk the talk when it comes to fostering corporate sustainability (CS) in their investee companies, or merely engage in greenwashing. This study investigates how responsible institutional investors truly are based on their voting records. It employs the political science model W-Nominate and uses a unique and international dataset containing the latest votes of 133 institutional investors and voting recommendations of ISS and Glass Lewis for a large sample of sustainability proposals. We also include those voting records on director elections for which institutional investors express sustainability voting rationales to capture those votes that are consequential for the corporate management. The ideal points of institutional investors mapped in a spatial model reveal that there are large differences between these investors. The results show that European investors are more socially responsible than US investors. The study provides strong empirical evidence that the Big Three have no true sustainability preferences and downgrades their claims to greenwashing.

Keywords: Engagement, Corporate Sustainability, Institutional investors, ESG

JEL Classification: G23, G32, G34, G39, M14

Suggested Citation

Lafarre, Anne, Do Institutional Investors Vote Responsibly? (February 16, 2022). TILEC Discussion Paper No. DP2022-001, Tilburg Law School Research Paper, Available at SSRN: or

Anne Lafarre (Contact Author)

Tilburg Law School, Private Business and Labour Law Department, TILEC ( email )

Tilburg, 5000 LE

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