“Shareholder Activism on Sustainability Issues” --New Harvard B-School Paper Will Further Inform Us on ESG “Materiality” & Impacts on Companies in Capital Markets

One of the most influential voices of the Harvard B-School faculty on corporate sustainability and sustainable investing trends is George Serafeim, the Jakurski Family Associate Professor of Business Administration.  He has teamed with Calvert and other organizations to produce a substantial, impressive body of work related to “making the investment” and “making the business” cases for both corporate managers and boards, as well as for institutional and individual investors.

In a commentary in the July 12th issue of the Harvard Business Review, he presents key highlights of a paper just published by him and his research team (Jody Grwal and Aaron Yoon) on the positive and negative affects of shareholder activism and capital market results (for affected companies).  The team looked at 2,665 proxy resolutions filed between 1997 and 2012 and presents in-depth research findings and conclusions in their paper (“Shareholder Activism on Sustainability Issues”). 

The importance of “Materiality” of “G” and “ESG” issues played a key role in what happens for the target companies in the capital markets, short- and longer-term after corporate managements took action on the issues raised in engagements and where proxy campaigns resulted. 

Where an ESG issue raised by shareholders was about an issue / issues that were indeed material, and corporate management responded by making changes, adjusting policies and practices and so on, there were positive results [for the company] in the capital markets. Where the issue E, S or G issue raised was im-material, management response had the opposite effect.

This is just a sample of some of the articles from this weeks SustainabilityHQ Highlights. You can view the full Highlights by using the following links. Sustainability | ESG, Highlights for the Week of July 19, 2016