CON ED OFFICES, NEW YORK, UNITED STATES - 2016/05/16: Joined by New York City-based climate and environmental justice advocates, unions, and actor James Cromwell, Finger Lakes residents made their voices heard outside of the Con Edison annual shareholder meeting. Photo: Erik McGregor / Pacific Press / LightRocket / Getty Images

By David Blackmon
24 June 2018
(Forbes) – A new study finds that the climate-based shareholder resolutions being so actively pushed by proxy advisory firms and their Environmental, Social and Governance (ESG)-based institutional investors have “no statistically significant impact” on a company’s bottom line, either positive or negative. The study, funded by the National Association of Manufacturers (NAM), was led by the highly-respected PHD economist Joseph Kalt, Senior Economist at Compass Lexecon and is the Ford Foundation Professor (Emeritus) of International Political Economy at the John F. Kennedy School of Government at Harvard University.
This was an interesting finding given the elevation of the demands from this kind of investor activism in the past several years, especially against fossil fuel companies, and the recent decision by several big institutional investor firms to use their market position in an attempt to frighten major oil and gas companies away from attempting to explore for oil in the always-controversial Arctic National Wildlife Reserve (ANWR). The study’s lead finding will no doubt not sit well with the proxy advisory firms who place such high priority on having their clients push climate change-related shareholder resolutions, or with the companies for whom such resolutions can create onerous new administrative burdens.
Kalt and his team state in the executive summary that claims by institutional investors that such resolutions actually benefit shareholders provided the main direction for their study:
“We focus on climate change resolutions both because of the growing activism on the part of certain large institutional investors around climate change disclosure and because of the argument upon which that activism is predicated, i.e., that such additional disclosure provides meaningful information to the marketplace and therefore serves to benefit shareholders. Our analysis fails to find support for such assertions.”
The report’s authors are unsurprised by their study’s findings. Noting the “stridency of arguments” that often accompany the debates over such proposals, the authors go on point out the reality that “The fundamental drivers of risk and the impact of an issue like climate change on the ability of management’s decisions to enhance or detract from shareholder value are political.” Which is, of course, absolutely correct.
The ability – or even the necessity – of a company to respond to a constantly shifting and evolving issue such as “climate change” depends to a very high degree on the whims of voters and the politicians they elect. Nowhere has this fundamental reality played out with greater impact over the past decade than in the United States of America. […]The proxy advisory firms and their institutional clients will no doubt continue to claim that their shareholder resolutions somehow enhance shareholder value. But this study indicates that what the proxy advisory firms are actually engaged in is a whole lot of sound and fury that at the end of the day signifies nothing. [more]

New Study Finds Climate Change Shareholder Resolutions Have No Impact