Firms’ socially responsible activities: the role of the Big Three

Lukai Yang ()
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Lukai Yang: AR Sanchez, Jr. School of Business, Texas A&M International University

Journal of Economics and Finance, 2023, vol. 47, issue 4, No 3, 859-883

Abstract: Abstract This paper examines the power and corporate governance significance of the three largest index fund managers, BlackRock, Vanguard, and State Street Global Advisors, commonly referred to as the “Big Three.” I provide evidence that they play a key role in strengthening the sustainable and socially responsible activities of portfolio companies. In this paper, I find that the Big Three are positively associated with the overall ESG score, environmental subscore, and social subscore. Interestingly, greater Big Three ownership leads to a higher vote-for percentage of SRI-related proposals, implying that voting is a channel through which they exert influence. My findings highlight the Big Three’s commitment to tackling ESG-related issues, in which they believe that integration of sustainability-related information can help portfolio risk management, and their ability to steer corporate decision-making.

Keywords: The Big Three; Sustainability; ESG; SRI-related proposals (search for similar items in EconPapers)
JEL-codes: D22 G23 G30 G34 G41 M14 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s12197-023-09622-1

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