Climate Change and Mutual Fund Voting on Climate Proposals
61 Pages Posted: 1 Jan 2022 Last revised: 11 Mar 2024
Date Written: January 1, 2024
Abstract
This paper explores whether investors’ personal experience with climate change affects
their voting behavior on climate-change-related proposals. We find that fund managers exposed to abnormally hot temperatures are significantly more likely to support
climate proposals. We further show that the effect is persistent. We observe significant heterogeneity in the effect of hot temperatures, depending on firm-level climate
risk, the quality of the proposals, fund investment strategy, and prior awareness of
climate change. Fund managers’ personal experience with climate change matters for
the outcome of climate proposals as it affects the aggregate support they receive. Fund
managers exposed to abnormally hot temperatures are also more likely to divest from
stocks with greater exposure to climate change.
Keywords: Climate Change, Shareholder Voting, Mutual Funds
JEL Classification: G30, Q54
Suggested Citation: Suggested Citation