Private Shareholder Engagements on Material ESG Issues

Financial Analysts Journal, Forthcoming

65 Pages Posted: 29 Jul 2022 Last revised: 31 May 2023

See all articles by Rob Bauer

Rob Bauer

Maastricht University; European Centre for Corporate Engagement (ECCE)

Jeroen Derwall

Maastricht University - European Centre for Corporate Engagement; Maastricht University - Department of Finance; Utrecht University - School of Economics

Colin Tissen

Maastricht University

Date Written: May 31, 2023

Abstract

We study private shareholder engagements with 2,465 listed firms about environmental, social, and governance (ESG) issues from 2007 to 2020. We examine to what extent private engagements address financially material ESG issues and contribute to firm performance. We find that material engagements succeed more often than immaterial engagements and that the targets of successful material engagements significantly outperform their peers by 2.5% over the next 14 months. Further, we find that material engagements are more often associated with improvements in profitability and cost ratios than immaterial engagements. Finally, our evidence indicates that a decrease in CO2e emission intensity accompanies environmental engagements.

Keywords: shareholder engagement, ESG, corporate sustainability, active ownership, materiality, sustainable finance, responsible investing

JEL Classification: G34, M14, Q56

Suggested Citation

Bauer, Rob and Derwall, Jeroen and Derwall, Jeroen and Tissen, Colin, Private Shareholder Engagements on Material ESG Issues (May 31, 2023). Financial Analysts Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4171496 or http://dx.doi.org/10.2139/ssrn.4171496

Rob Bauer

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 3883871 (Phone)

European Centre for Corporate Engagement (ECCE) ( email )

Tongersestraat 53
Maastricht, 6211LM
Netherlands

Jeroen Derwall

Maastricht University - European Centre for Corporate Engagement ( email )

FEBA
Tongersestraat 53
Maastricht, Limburg 6200MD
Netherlands

HOME PAGE: http://www.corporate-engagement.com/

Maastricht University - Department of Finance ( email )

Maastricht, 6200 MD
Netherlands

HOME PAGE: http://www.fdewb.unimaas.nl/finance/?page=member&id=175

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands

Colin Tissen (Contact Author)

Maastricht University ( email )

Tongersestraat 53
Maastricht, Limburg 6211LM
Netherlands

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