The Big Three and Corporate Carbon Emissions Around the World

76 Pages Posted: 23 Dec 2020

See all articles by Jose Azar

Jose Azar

Princeton University - Department of Economics

Miguel Duro

IESE Business School

Igor Kadach

University of Navarra, IESE Business School

Gaizka Ormazabal

University of Navarra, IESE Business School; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Date Written: December 2020

Abstract

This paper examines the role of the "Big Three" (i.e., BlackRock, Vanguard, and State Street Global Advisors) on the reduction of corporate carbon emissions around the world. Using novel data on engagements of the Big Three with individual firms, we find evidence that the Big Three focus their engagement effort on large firms with high CO2 emissions in which these investors hold a significant stake. Consistent with this engagement influence being effective, we observe a strong and robust negative association between Big Three ownership and subsequent carbon emissions among MSCI index constituents, a pattern that becomes stronger in the later years of the sample period as the three institutions publicly commit to tackle ESG issues.

JEL Classification: M41

Suggested Citation

Azar, Jose and Duro, Miguel and Kadach, Igor and Ormazabal, Gaizka, The Big Three and Corporate Carbon Emissions Around the World (December 2020). CEPR Discussion Paper No. DP15522, Available at SSRN: https://ssrn.com/abstract=3753922

Jose Azar (Contact Author)

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

HOME PAGE: http://www.princeton.edu/~jazar/

Miguel Duro

IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Igor Kadach

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Gaizka Ormazabal

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
309
PlumX Metrics