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From Passive Owners to Planet Savers? Asset Managers, Carbon Majors and the Limits of Sustainable Finance

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  • Baines, Joseph
  • Hager, Sandy Brian

Abstract

This article examines the role of the Big Three asset management firms – BlackRock, Vanguard and State Street – in corporate environmental governance. Specifically, it charts the Big Three's relationships with the publicly-owned Carbon Majors: a small group of fossil fuels, cement and mining companies responsible for the bulk of industrial greenhouse gas emissions. It finds that the Big Three much more often than not oppose rather than support shareholder resolutions aimed at improving environmental governance. Notably, this is even the case with the Big Three's environmental, social and governance funds. A more fine-gained analysis shows that the combined voting decisions of the Big Three are more likely to lead to the failure than to the success of environmental resolutions and that, whether they succeed or fail, these resolutions tend to be narrow in scope and piecemeal in nature. Based on these findings, the article raises serious doubts about the Big Three's credentials as environmental stewards.

Suggested Citation

  • Baines, Joseph & Hager, Sandy Brian, 2022. "From Passive Owners to Planet Savers? Asset Managers, Carbon Majors and the Limits of Sustainable Finance," EconStor Preprints 249674, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:249674
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    File URL: https://www.econstor.eu/bitstream/10419/249674/1/20220200-baines-hager-from-passive-owners-to-planet-savers.pdf
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    References listed on IDEAS

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    Cited by:

    1. Wilson, Christian & Caldecott, Ben, 2023. "Investigating the role of passive funds in carbon-intensive capital markets: Evidence from U.S. bonds," Ecological Economics, Elsevier, vol. 209(C).
    2. Pape, Fabian & Petry, Johannes, 2023. "East Asia and the politics of global finance: a developmental challenge to the neoliberal consensus?," LSE Research Online Documents on Economics 118296, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    climate; finance; oil; ownership and control;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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