The Real Effects of Environmental Activist Investing

The Real Effects of Environmental Activist Investing

S. Lakshmi Naaraayanan, Kunal Sachdeva, Varun Sharma

Series number :

Serial Number: 

Date posted :

March 30 2021

Last revised :

March 30 2021
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  • Activism • 
  • Environmental Social and Governance • 
  • socially responsible investment • 
  • Corporate Social Responsibility • 
  • Pensions

We study the real effects of environmental activist investing. Using plant-level data, we find that targeted firms reduce their toxic releases, greenhouse gas emissions, and cancer-causing pollution. Improvements in air quality within a one-mile radius of targeted plants suggest potentially important externalities to local economies.

These improvements come through increased capital expenditures on new abatement initiatives. We rule out alternative explanations of decline in production, reporting biases, and forms of selection, while also providing evidence supporting the external validity of environmental activism. Overall, our study suggests that engagements are an effective tool for long-term shareholders to address climate change risks.




Real name:
S. Lakshmi Naaraayanan
Real name:
Kunal Sachdeva
Real name:
Varun Sharma