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Do Institutional Investors Vote Responsibly?

Authors: Lafarre, Anne;

Do Institutional Investors Vote Responsibly?

Abstract

Existing research and practical evidence highly question whether institutional investor truly walk the talk when it comes to fostering corporate sustainability (CS) in their investee companies, or merely engage in greenwashing. This study investigates how responsible institutional investors truly are based on their voting records. It employs the political science model W-Nominate and uses a unique and international dataset containing the latest votes of 133 institutional investors and voting recommendations of ISS and Glass Lewis for a large sample of sustainability proposals. We also include those voting records on director elections for which institutional investors express sustainability voting rationales to capture those votes that are consequential for the corporate management. The ideal points of institutional investors mapped in a spatial model reveal that there are large differences between these investors. The results show that European investors are more socially responsible than US investors. The study provides strong empirical evidence that the Big Three have no true sustainability preferences and downgrades their claims to greenwashing.

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Netherlands
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
2
Average
Average
Average
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