Socially responsible investing and multinationals' environmental harm: Evidence from global remote sensing data

Virginia Gianinazzi, Victoire Girard, Mehdi Lehlali and Melissa Prado

No 19611, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study how socially responsible investment (SRI) affects multinational firms’ environmental footprint using satellite measures of vegetation health around 52,806 facilities in 124 countries, combined with institutional ownership data from 2006 to 2020. We identify SRI effects using two asset-manager-level designs and within-firm changes in responsible ownership. Higher SRI ownership improves vegetation health, but these improvements are concentrated around facilities in OECD countries, while vegetation health deteriorates around non-OECD facilities of the same firms. The asymmetry is strongest among investors reporting advanced stewardship practices. Our findings suggest that investor stewardship and public regulation are complementary in shaping firms’ environmental behavior.

Keywords: Social responsible investing; Institutional investors; Multinational enterprises (search for similar items in EconPapers)
JEL-codes: F23 G23 O33 Q56 Q58 (search for similar items in EconPapers)
Date: 2024-10
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Working Paper: Socially responsible investing and multinationals' environmental harm: Evidence from global remote sensing data (2025)
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