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Blackrock vs Norway Fund at Shareholder Meetings: Institutional Investors’ Votes on Corporate Externalities

Author

Listed:
  • Marie Brière

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Sébastien Pouget

    (TSM - Toulouse School of Management Research - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse)

  • Loredana Ureche-Rangau

    (CRIISEA - Centre de Recherche sur les Institutions, l'Industrie et les Systèmes Économiques d'Amiens - UR UPJV 3908 - UPJV - Université de Picardie Jules Verne)

Abstract

Do institutional investors engage with companies on corporate externalities such as greenhouse gas emissions? And if so, why? We study voting at shareholder meetings by two emblematic global investors: BlackRock, a major asset manager, and the Norway Fund, a responsible sovereign wealth fund. Our data cover 2014 and include the two institutions' votes on 35,382 resolutions at 2,796 corporations across the world. Both of these so-called universal owners oppose management significantly more often on externality than on financial issues. The Norway Fund is more active on shareholder resolutions concerning externalities related to environmental and social issues rather than governance issues. The difference between the two investors' voting behavior is larger when we focus on resolutions related to greenhouse gas emissions, a clearly identified externality. Overall, universal ownership (see, e.g., Monks and Minow, 1995) and, more importantly, delegated philanthropy (see, e.g., Benabou and Tirole, 2010) both appear to provide incentives for institutional investors to combat negative externalities generated by firms.

Suggested Citation

  • Marie Brière & Sébastien Pouget & Loredana Ureche-Rangau, 2020. "Blackrock vs Norway Fund at Shareholder Meetings: Institutional Investors’ Votes on Corporate Externalities," Post-Print hal-03832257, HAL.
    • Handle: RePEc:hal:journl:hal-03832257
    as

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