Shareholder Influence on Corporate ESG Strategies

• In Event: 50620 - Section on Environmental Sociology Roundtables
  In Refereed Roundtable (60 minute): Table 1: Corporate Power and Strategy Amid Environmental Problems

Abstract

The escalating impacts of climate change, evidenced by the recent announcement of a global yearly average temperature above 1.5 degrees Celsius, underscore the urgent need for corporate accountability. However, the dynamics of corporate climate communication to shareholders, particularly the ability of shareholders to influence corporate strategy, remain under explored. This study addresses the gap by analyzing the evolution of corporate ESG strategies and net-zero commitments in the quarterly earnings calls of publicly traded firms during the 2010s and early 2020s. I focus on descriptive analysis of the emergence of ESG along with quantitative measures of consolidation across sectors using cosine similarity of word embeddings. Finally, to assess the influence of specific institutional shareholders on corporate discourse, I employ multilevel network regression models, accounting for firm and sector levels, to analyze the relationship between shareholder composition and the semantic similarity of firm speech. The results of this study provide a unique window into the ability of shareholders to influence corporations, and corporations to manage framing of their strategies via quarterly earnings calls.

Author

• Thomas Marlow, Texas A&M University-College Station