The Impact of Climate Engagement: A Field Experiment

28 Pages Posted: 1 Feb 2024 Last revised: 6 Feb 2024

See all articles by Florian Heeb

Florian Heeb

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Julian F Kölbel

University of St. Gallen - School of Finance; MIT Sloan; Swiss Finance Institute

Date Written: January 24, 2024

Abstract

We report results from a pre-registered field experiment about the impact of index provider engagement on corporate climate policy. A randomly chosen group of 300 out of 1227 international companies received a letter from an index provider, encouraging the company to commit to setting a science-based climate target to remain included in its climate transition benchmark indices. After one year, we observed a significant effect: 21.0% of treated companies have committed, vs. 15.7% in the control group. This suggests that engagement by financial institutions can affect corporate policies when a feasible request is combined with a credible threat of exit.

Keywords: Shareholder Engagement, Field Experiment, Climate, ESG, Activism

JEL Classification: D22, D62, G23, G34, M14

Suggested Citation

Heeb, Florian and Kölbel, Julian, The Impact of Climate Engagement: A Field Experiment (January 24, 2024). Swiss Finance Institute Research Paper No. 24-04, Available at SSRN: https://ssrn.com/abstract=4711873 or http://dx.doi.org/10.2139/ssrn.4711873

Florian Heeb

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Julian Kölbel (Contact Author)

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St. Gallen, 9000
Switzerland

MIT Sloan ( email )

100 Main Street
Cambridge, MA 02142
United States

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

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