The Big Three and corporate carbon emissions around the world

José Azar, Miguel Duro, Igor Kadach and Gaizka Ormazabal

Journal of Financial Economics, 2021, vol. 142, issue 2, 674-696

Abstract: This paper examines the role of the “Big Three” (i.e., BlackRock, Vanguard, and State Street Global Advisors) on the reduction of corporate carbon emissions around the world. Using novel data on engagements of the Big Three with individual firms, we find evidence that the Big Three focus their engagement effort on large firms with high CO2 emissions in which these investors hold a significant stake. Consistent with this engagement influence being effective, we observe a strong and robust negative association between Big Three ownership and subsequent carbon emissions among MSCI index constituents, a pattern that becomes stronger in the later years of the sample period as the three institutions publicly commit to tackle Environmental, Social, and Governance (ESG) issues.

Keywords: Climate change; Carbon emissions; ESG; Big three; Shareholder activism; Institutional ownership (search for similar items in EconPapers)
JEL-codes: G15 G23 G30 M41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (92)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304405X21001896
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:142:y:2021:i:2:p:674-696

DOI: 10.1016/j.jfineco.2021.05.007

Access Statistics for this article

Journal of Financial Economics is currently edited by G. William Schwert

More articles in Journal of Financial Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().