Reuisiting the Big Three and their role in global corporate carbon emissions
Abstract
Emissions from listed companies are responsible for 40% of global
greenhouse gas emissions (Preston & Ward, 2021), which makes
investors a critical change agent in the transition to a net zero
economy. We examine the role of the three biggest institutional
investors, the Big Three (Blackrock, Vanguard and State Street), on
the reduction of corporate carbon emissions. The Big Three represent
some of the largest owners of US listed companies and thus could
have substantial voting power and influence over firms’ emissions.
Using methodologies from Azar et al.’s (2021) original Big Three
study, we find that the Big Three are associated with reduced
corporate carbon emissions from 2014-2022. We do not find that the
association between the Big Three and emission reductions have
increased over time, nor do we find evidence that larger Big Three
holdings result in larger emission reductions. These last two findings
are contrary to Azar et al.’s (2021) results, and we hypothesize that
the differences are due to our broader firm coverage, exclusion of
estimated data from our sample, and our use of more appropriate
fixed effects.
Description
Masteroppgave(MSc) in Master of Science in Sustainable finance - Handelshøyskolen BI, 2023