Environmental Externalities of Hedge Fund Activism
Finance & Accounting
|Speaker:||Ian Appel, Carroll School of Management, Boston College|
|Date: ||Wednesday 24 February 2021|
|Time: ||16:00 - 17:00|
|Location: ||Online via Zoom (link available from J.Lashkor@exeter.ac.uk)|
We study the eect of hedge fund activism on corporate environmental behaviors.
Using plant-chemical level data from the EPA, we nd that activism campaigns are as-
sociated with a 17 percent drop in emissions for chemicals at plants of targeted rms.
Campaigns are associated with changes across a wide range of chemicals, including
those emitted into the air, water, and ground and those that are harmful to humans.
Evidence suggests this change in environmental behavior stems from a drop in produc-
tion rather than an increase in abatement activities. The net eect on environmental
eciency is positive, with emissions falling by 8 percent per unit of output. Overall,
our ndings highlight the idea that the benets of activism are not necessarily conned
to shareholders, but may also extend to other stakeholders (e.g., the local community)
aected by rms' emissions.