Do Salient Climatic Risks Affect Shareholder Voting?

50 Pages Posted: 2 Aug 2021 Last revised: 14 Nov 2023

See all articles by Eliezer M. Fich

Eliezer M. Fich

Drexel University - Department of Finance

Guosong Xu

Rotterdam School of Management, Erasmus University

Date Written: November 13, 2023

Abstract

Institutional shareholders affected by hurricanes subsequently support environmental proposals in non-affected firms even if they never voted for similar initiatives. Affected shareholders raise their holdings in firms where their pro-climate votes are consequential. More voting support after hurricanes has real effects as environmental proposals endorsed by more hurricane-afflicted shareholders are more likely to pass. Moreover, upon passing environmental proposals, firms exhibit non-trivial decreases in their market capitalization and downgrades by equity analysts. Our evidence indicates that by changing shareholders’ perceptions of the risks faced by their portfolio firms, disruptive life events ultimately shape environmental activism, corporate policies, and firm performance.

Keywords: Shareholder voting; Hurricanes; Risk perception; Salience; Behavioral bias

JEL Classification: D72; D91; G41; Q54

Suggested Citation

Fich, Eliezer M. and Xu, Guosong, Do Salient Climatic Risks Affect Shareholder Voting? (November 13, 2023). Proceedings of Paris December 2021 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: https://ssrn.com/abstract=3895071 or http://dx.doi.org/10.2139/ssrn.3895071

Eliezer M. Fich

Drexel University - Department of Finance ( email )

LeBow College of Business
3220 Market Street – 11th Floor
Philadelphia, PA 19104
(215) 895-2304 (Phone)

HOME PAGE: http://https://sites.google.com/view/eliezerfich

Guosong Xu (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

RSM Erasmus University
PO Box 1738
Rotterdam, 3062 PA
Netherlands

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
450
Abstract Views
2,307
Rank
117,962
PlumX Metrics