Mutual funds’ strategic voting on environmental and social issues

Mutual funds’ strategic voting on environmental and social issues

Roni Michaely, Guillem Ordonez-Calafi, Silvina Rubio

Series number :

Serial Number: 
774/2021

Date posted :

August 08 2021

Last revised :

August 08 2021
SSRN Share

Keywords

  • responsible investment • 
  • strategic voting • 
  • mutual funds • 
  • fiduciary duty

Environmental and social (ES) funds in non-ES families must balance incorporating the stakeholder's interests they advertise and maximizing shareholder value favored by their families. We find that these funds support ES proposals that are far from the majority threshold, while opposing them when their vote is more likely to be pivotal, consistent with greenwashing.

This strategic voting is not exhibited in governance proposals, by ES funds in ES families or by non-ES funds in non-ES families, reinforcing the notion of strategic voting to accommodate family preferences while appearing to meet the fiduciaries responsibilities of the funds.

Authors

Real name:
Guillem Ordonez-Calafi
Real name:
Silvina Rubio