Purpose The authors study the effect of increasing environmental awareness on shareholders' activism. Specificallly, this study aims to examine whether growing environmental awareness is reflected in more aggressive environmental shareholder proposals. Design/methodology/approach This study uses the 2010 Deepwater Horizon oil spill disaster as an exogenous event that increased shareholders' environmental awareness. This study analyzes the spill’s effect on the tone of proposals about environmental issues and nonenvironmental topics. Findings After the disaster, the tone of environmental proposals (i.e. the treatment group) is significantly more negative. In contrast, the tone of nonenvironmental proposals (i.e. the control group) is unaffected. This study interprets this finding as direct evidence that the oil spill led to increased shareholder environmental activism through proposals that targeted the environmental risks surrounding the business more aggressively. By contrast, this study finds no effect of the oil spill on the tone of managers' responses to the proposals, consistent with managers refraining from emphasizing environmental threats. Originality/value Anecdotal evidence and recent studies suggest a link between environmental disasters and shareholder pressure for corporate change. However, no prior research has investigated the channel through which shareholders could have exerted such pressure or has looked for direct evidence of it in the negotiations between shareholders and managers. By finding such evidence in shareholder proposals, this study fills in this gap.

Environmental awareness and shareholder proposals: the case of the Deepwater Horizon oil spill disaster

D'Augusta, Carlo
;
Grossetti, Francesco;Imperatore, Claudia
In corso di stampa

Abstract

Purpose The authors study the effect of increasing environmental awareness on shareholders' activism. Specificallly, this study aims to examine whether growing environmental awareness is reflected in more aggressive environmental shareholder proposals. Design/methodology/approach This study uses the 2010 Deepwater Horizon oil spill disaster as an exogenous event that increased shareholders' environmental awareness. This study analyzes the spill’s effect on the tone of proposals about environmental issues and nonenvironmental topics. Findings After the disaster, the tone of environmental proposals (i.e. the treatment group) is significantly more negative. In contrast, the tone of nonenvironmental proposals (i.e. the control group) is unaffected. This study interprets this finding as direct evidence that the oil spill led to increased shareholder environmental activism through proposals that targeted the environmental risks surrounding the business more aggressively. By contrast, this study finds no effect of the oil spill on the tone of managers' responses to the proposals, consistent with managers refraining from emphasizing environmental threats. Originality/value Anecdotal evidence and recent studies suggest a link between environmental disasters and shareholder pressure for corporate change. However, no prior research has investigated the channel through which shareholders could have exerted such pressure or has looked for direct evidence of it in the negotiations between shareholders and managers. By finding such evidence in shareholder proposals, this study fills in this gap.
In corso di stampa
2023
D'Augusta, Carlo; Grossetti, Francesco; Imperatore, Claudia
File in questo prodotto:
File Dimensione Formato  
10-1108_CG-03-2022-0139.pdf

accesso aperto

Descrizione: article
Tipologia: Pdf editoriale (Publisher's layout)
Licenza: Creative commons
Dimensione 255.99 kB
Formato Adobe PDF
255.99 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4056297
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? 2
social impact