Do all institutional investors care about corporate carbon emissions?
Journal article
Authors | Alam, M., Alam, S. and Islam, S. |
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Abstract | This paper investigates whether institutional investors promote the abatement of corporate carbon emissions. Using firm-level data on the U. S from 2007 to 2017, we find that institutional investors help reduce carbon emissions. The result is more pronounced in firms with more independent (investment companies, investment advisors, and pension funds), long-term, and monitoring institutional ownership. Our result holds when we employ a quasi-natural experiment and the difference-in-differences approach to address endogeneity. The channel analysis documents that institutional investors help reduce carbon emissions by reducing energy consumption. We also find that shareholder activism is a proximal monitoring mechanism through which institutional investors influence firms to achieve better carbon performance. Finally, our results show that the advantage for institutional investors from reducing carbon emissions is higher firm value. |
Keywords | Carbon emissions ; Institutional investors ; Monitoring Investment horizon |
Year | 2022 |
Journal | Energy Economics |
Journal citation | 115, pp. 1-20 |
Publisher | Elsevier |
ISSN | 1873-6181 |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.eneco.2022.106376 |
Web address (URL) | https://doi.org/10.1016/j.eneco.2022.106376 |
Publisher's version | License File Access Level Open |
Output status | Published |
Publication dates | |
Online | 21 Oct 2022 |
Publication process dates | |
Accepted | 11 Oct 2022 |
Deposited | 11 Dec 2023 |
Supplemental file | File Access Level Open |
https://repository.derby.ac.uk/item/q1953/do-all-institutional-investors-care-about-corporate-carbon-emissions
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