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Mutual fund pollution experience and environmental voting

Author

Listed:
  • Foroughi, Pouyan
  • Marcus, Alan
  • Nguyen, Vinh

Abstract

We study the relationship between mutual fund management's direct experience with extreme environment events and the fund's voting behavior on environmental issues. We find that higher air pollution in a fund's home county increases its propensity to vote in support of shareholders' environmental proposals. The effect is weakened by fund manager turnovers, and managers' affiliation with the Republican Party. Conversely, the effect is stronger for more highly contested environmental proposals. Overall, our results suggest that mutual fund management's direct experience with extreme environment events plays a significant role in motivating the fund's environmental engagements.

Suggested Citation

  • Foroughi, Pouyan & Marcus, Alan & Nguyen, Vinh, 2024. "Mutual fund pollution experience and environmental voting," Journal of Banking & Finance, Elsevier, vol. 162(C).
    • Handle: RePEc:eee:jbfina:v:162:y:2024:i:c:s0378426624000694
    DOI: 10.1016/j.jbankfin.2024.107149
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    References listed on IDEAS

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    More about this item

    Keywords

    Mutual fund voting; Environment; Air pollution;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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