Prof. Alberta Di Giuli and her co-authors showed that investors’ personal experience of climate change affects their voting behaviour on environmental issues.
ESCP Business School Professor Alberta Di Giuli, Alexandre Garel (Audencia Business School), Roni Michaely (The University of Hong Kong; ECGI) and Arthur Petit-Romec (Toulouse Business School) received the best new frontier paper award by the AFFI (the French Finance Association) during their 38th international conference for a working paper that was published by the European Corporate Governance Institute and explores whether investors’ personal experience of climate change affects their voting behaviour on environmental issues. “Mutual fund managers, which are dominant players in the proxy voting process, are significantly more likely to support environmental proposals after being exposed to abnormally hot temperatures,” they explain.
“Evidence suggests that experiencing abnormally hot temperatures may act as a ‘wake-up call’ for fund managers, that alerts them about environmental issues,” they add. In particular, the researchers find that funds with an a priori lower tendency to support environmental proposals (e.g., non-ES funds, funds located in areas less receptive to scientific evidence on climate change, and funds located in Republican states in the U.S.) are more prone to react to abnormally hot temperatures. “We showed that investors’ experiences and increased awareness of climate change have a positive effect on their support for environmental policies.”
According to their research, support for environmental proposals following hot temperatures exposure does not increase in an undifferentiated way but is significantly more pronounced for firms with greater exposure to climate risk. “Overall, our study sheds light on the role played by personal experience of climate change for shareholder voice on environmental issues,” they conclude.