IDEAS home Printed from https://ideas.repec.org/p/chf/rpseri/rp2377.html
   My bibliography  Save this paper

ESG Shareholder Engagement and Downside Risk

Author

Listed:
  • Andreas G. F. Hoepner

    (University College Dublin)

  • Ioannis Oikonomou

    (University of Reading)

  • Zacharias Sautner

    (University of Zurich; Swiss Finance Institute; ECGI)

  • Laura T. Starks

    (University of Texas at Austin)

  • Xiaoyan Zhou

    (University of Oxford)

Abstract

We show that engagement on environmental, social, and governance issues can benefit shareholders by reducing firms’ downside risks. We find that the risk reductions (measured using value at risk and lower partial moments) vary across engagement types and success rates. Engagement is most effective in lowering downside risk when addressing environmental topics (primarily climate change). Further, targets with large downside risk reductions exhibit a decrease in environmental incidents after the engagement. We estimate that the value at risk of engagement targets decreases by 9% of the standard deviation after successful engagements, relative to control firms.

Suggested Citation

  • Andreas G. F. Hoepner & Ioannis Oikonomou & Zacharias Sautner & Laura T. Starks & Xiaoyan Zhou, 2023. "ESG Shareholder Engagement and Downside Risk," Swiss Finance Institute Research Paper Series 23-77, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2377
    as

    Download full text from publisher

    File URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2874252
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ESG; Shareholder Activism; Downside Risk; Corporate Governance; Climate Change;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chf:rpseri:rp2377. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ridima Mittal (email available below). General contact details of provider: https://edirc.repec.org/data/fameech.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.