Delegated Philanthropy in Mutual Fund Votes on Climate Change Externalities

Abstract

This chapter studies the votes of institutional investors on shareholder resolutions instructing corporations to mitigate climate change externalities. Our sample includes 238 US fund families that voted on 14,409 different shareholder resolutions at 2,700 companies over the period from 2013 to 2016. We find that, in line with the delegated philanthropy logic, fund families that have larger proportions of responsible investments display a larger support for resolutions on climate change. This result holds i) especially for fund families with large percentage of SRI, ii) whether ISS favors or not these resolutions, iii) when these resolutions end up being close call votes, and iv) when we focus only on fund families that have voted more than 50 or 100 resolutions on environmental and social issues.

Keywords: Climate change externalities, Delegated philantropy, Mutual Fund Families, Voting

JEL Classification: G11, F21, G23