- Change •
- Shareholder voting •
- mutual funds
This paper explores whether investors’ personal experience of climate change affects their voting behavior on environmental issues. We find that fund managers exposed to abnormally hot temperatures are significantly more likely to support environmental proposals. This increased support is stronger for proposals targeting firms with greater climate risk.
The effect is less pronounced for funds that are already climate-conscious (e.g., environmental-friendly funds and funds located in areas more receptive to scientific evidence of climate change). We further show that environmental proposals receive greater aggregate support when the fraction of mutual funds exposed to abnormally hot temperatures is high. Overall, we show that fund managers’ experiences and increased awareness of climate change have a positive effect on their support for environmental policies.