Do Institutional Investors Vote Responsibly? Global Evidence

52 Pages Posted: 1 Mar 2022 Last revised: 30 Jan 2024

See all articles by Anne Lafarre

Anne Lafarre

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

Date Written: January 30, 2024


This study investigates the true sustainability actions of institutional investors, with a focus on potential disparities in voting patterns between US and European investors. Utilizing an extensive dataset of Environmental, Social, and Governance (ESG) and director voting data spanning from 2018 to 2023 from the Insightia database, the study encompasses 188 institutional investors globally, including 'The Big Three,' and major proxy advisors ISS and Glass Lewis. Employing the political science W-Nominate model, the research maps investor sustainability ideology on a spatial model [-1,+1]. The findings reveal that European institutional investors, confronted with more robust social and legal norms, genuinely exhibit ESG preferences, while the sustainability claims of many US investors, including The Big Three and self-proclaimed ESG funds, may be deemed as greenwashing.

This paper makes a substantial contribution to the rapidly expanding body of literature on institutional investors and ESG. It is the first to use of the W-Nominate model in an international context with a substantial and recent sample of ESG voting items, providing a more comprehensive global understanding of the factors influencing sustainable investor behavior. The findings emphasize the critical consideration of an investor’s domicile and type when assessing true sustainability preferences, particularly in the context of anti-ESG developments.

The paper underscores the necessity to scrutinize institutional investors’ sustainability claims and advocates for regulators to enforce ESG disclosure regulations. Asset owners and other clients of institutional investors are urged to exercise caution when interpreting sustainability commitments, recognizing that, for some, these may be more driven by financial considerations than genuine environmental and social concerns, often lacking actual shareholder actions to foster sustainability.

Keywords: Engagement; Corporate Sustainability; Institutional investors; ESG; voting; International

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

Suggested Citation

Lafarre, Anne, Do Institutional Investors Vote Responsibly? Global Evidence (January 30, 2024). 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

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics