Do Employees Care about ESG? Evidence from Employee Share Plans
61 Pages Posted: 25 Jul 2022 Last revised: 30 Nov 2023
Date Written: July 15, 2022
Using unique data on French firm-sponsored savings plans, we establish that there exists a significant negative relationship between firms’ ESG incidents and their employees’ investments in the company’s stock. Incidents in the “Social” category, especially those related to employee working conditions, exert the most substantial influence on these investment decisions. Conversely, incidents in the “Environment” and “Governance” categories exhibit no discernible impact. Pecuniary motives do not explain these findings. Overall, our results point to employees exhibiting parochial altruism, caring about their own interests and the interests of their colleagues within the company when making investment decisions in their company’s stock.
Keywords: ESG, 401(k), employee ownership, employee satisfaction
JEL Classification: G11, G41
Suggested Citation: Suggested Citation