Can investor coalitions drive corporate climate action?

Hastreiter, Nikolaus (2024) Can investor coalitions drive corporate climate action? Geography and Environment Discussion Paper Series (49). Department of Geography and Environment, The London School of Economics and Political Science, London, UK.

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Abstract

This paper investigates the effectiveness of collective investor engagement in regulating corporate climate action. Empirically, I focus on Climate Action 100+ (CA100+), the world’s largest investor coalition on climate change. To address common measurement issues in previous research, I conduct a multidimensional assessment of companies’ climate action. In particular, I collect new primary data on the ambition of carbon emission reduction targets and use the ClimateBERT model to analyse climate-related disclosure. To isolate the causal impact of CA100+, I examine the selection of the coalition’s focus companies and employ a Difference-in-differences analysis. While the findings suggest that CA100+ has had no effect on companies’ disclosures or reductions in carbon emissions, I observe a significant impact on targets. However, this effect holds only for medium- and long-term targets, not in the short-term, and is exclusively driven by companies potentially selected based on prior investor knowledge. Overall, this study finds limited effectiveness of collective engagement through CA100+. It raises questions about the importance of investor selectivity for engagement success and highlights the risk of companies backloading their decarbonisation efforts.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.lse.ac.uk/geography-and-environment/re...
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HC Economic History and Conditions G Geography. Anthropology. Recreation > GE Environmental Sciences H Social Sciences > HG Finance
JEL classification:	Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M14 - Corporate Culture; Social Responsibility
Date Deposited:	22 Oct 2024 13:24
Last Modified:	04 Nov 2024 10:42
URI:	http://eprints.lse.ac.uk/id/eprint/125852

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