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- Title
Firms' socially responsible activities: the role of the Big Three.
- Authors
Yang, Lukai
- Abstract
This paper examines the power and corporate governance significance of the three largest index fund managers, BlackRock, Vanguard, and State Street Global Advisors, commonly referred to as the "Big Three." I provide evidence that they play a key role in strengthening the sustainable and socially responsible activities of portfolio companies. In this paper, I find that the Big Three are positively associated with the overall ESG score, environmental subscore, and social subscore. Interestingly, greater Big Three ownership leads to a higher vote-for percentage of SRI-related proposals, implying that voting is a channel through which they exert influence. My findings highlight the Big Three's commitment to tackling ESG-related issues, in which they believe that integration of sustainability-related information can help portfolio risk management, and their ability to steer corporate decision-making.
- Subjects
STATE Street Global Advisors Inc.; CORPORATE sustainability; INDEX mutual funds; CORPORATE power; PORTFOLIO management (Investments); CORPORATE governance; BUSINESS enterprises; ETHICAL investments
- Publication
Journal of Economics & Finance, 2023, Vol 47, Issue 4, p859
- ISSN
1055-0925
- Publication type
Article
- DOI
10.1007/s12197-023-09622-1