Institutional Investors' Votes on Corporate Externalities: The Case of Two Emblematic Investors

Summary Are institutional investors engaging with the issue of corporate externalities, such as greenhouse gas emissions? We study voting in the shareholder meetings of two iconic investors: BlackRock, a major international portfolio manager, and the Norwegian Fund, a responsible sovereign wealth fund. Our data covers 2014 and contains 35,382 resolutions voted by both institutions at 2,796 companies around the world. Both so-called universal investors oppose management more often on issues related to externalities than on financial issues. The Norwegian fund is more active on resolutions related to environmental and social externalities than on governance issues. The difference in behavior between the two investors is even greater if we focus on resolutions related to climate change. In the end, the logic of delegated philanthropy seems to be a stronger motivation than that of the universal investor to combat externalities.