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The Impact of Climate Engagement: A Field Experiment

Author

Listed:
  • Florian Heeb

    (Massachusetts Institute of Technology (MIT) - Sloan School of Management)

  • Julian F Kölbel

    (University of St. Gallen - School of Finance; MIT Sloan; Swiss Finance Institute)

Abstract

We report results from a pre-registered field experiment about the impact of index provider engagement on corporate climate policy. A randomly chosen group of 300 out of 1227 international companies received a letter from an index provider, encouraging the company to commit to setting a science-based climate target to remain included in its climate transition benchmark indices. After one year, we observed a significant effect: 21.0% of treated companies have committed, vs. 15.7% in the control group. This suggests that engagement by financial institutions can affect corporate policies when a feasible request is combined with a credible threat of exit.

Suggested Citation

  • Florian Heeb & Julian F Kölbel, 2024. "The Impact of Climate Engagement: A Field Experiment," Swiss Finance Institute Research Paper Series 24-04, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2404
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    More about this item

    Keywords

    Shareholder Engagement; Field Experiment; Climate; ESG; Activism;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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