The authors examine whether institutional engagement on environmental, social, and governance issues influences corporate behavior and shareholder value. Using a sample spanning 1999 through 2009, they find successful interventions coincide with stronger market performance, operating results, efficiency, and governance, while unsuccessful efforts show little impact.
Active Ownership
Elroy Dimson, Oğuzhan Karakaş
Research
55 Pages
Key Takeaways
Success Takes Time: Only 18% of engagements succeeded, typically requiring 2 to 3 interactions and roughly 18 months.
Returns Follow Results: Successful engagements produced a 4.4% one year abnormal return, compared with approximately 0% for unsuccessful efforts.
Climate Led Gains: Successful climate engagements generated 10.6% abnormal returns over 12 months, versus 7.1% for corporate governance engagements.
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