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

Further details

We study the e ect 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 e ect on environmental eciency is positive, with emissions falling by 8 percent per unit of output. Overall, our ndings highlight the idea that the bene ts of activism are not necessarily con ned to shareholders, but may also extend to other stakeholders (e.g., the local community) a ected by rms' emissions.