Climate Risk Engagements

François Derrien (), Alexandre Garel, Arthur Romec and Feng Zhou
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François Derrien: HEC Paris
Alexandre Garel: Audencia Business School
Arthur Romec: Toulouse Business School
Feng Zhou: Toulouse Business School

No 1543, HEC Research Papers Series from HEC Paris

Abstract: We study climate-risk related engagements by one of the world's largest investors. Climate risk engagements represent a growing fraction of ESG engagements and are more frequent in high carbon emissions industries. We find that firms with greater carbon footprint and greater exposure to climate transition risk are more likely to be targeted. Following a climate risk engagement, targeted firms are more likely to commit to adopt a science-based climate target and to disclose climate-related information. Targeted firms also experience a reduction in their carbon emissions. However this reduction is limited to scope 1 and 2 emissions and its magnitude is inconsistent with net-zero targets. We also find that climate risk engagements are associated with greater voting support for management. Overall, our results suggest that shareholder engagement on climate issues can be an important tool in the fight against climate change.

Keywords: Shareholder Engagement; Climate Change; Carbon Emissions; ESG; Activism (search for similar items in EconPapers)
JEL-codes: D62 G23 G32 G34 M14 Q54 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2025-01-28
New Economics Papers: this item is included in nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1543

DOI: 10.2139/ssrn.5051906

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