The Real Effects of Environmental Activist Investing
Toxic chemical releases at targeted firms fall 13% after environmental activist campaigns.
S. Lakshmi Naaraayanan, Kunal Sachdeva, Varun Sharma
Review of Financial Studies, forthcoming (published online August 2026)
We examine how environmental activist investors drive firms to reduce their toxic releases, greenhouse-gas emissions, and cancer-causing pollution. Plants of targeted firms reduce their total toxic chemical releases by 13% on average through preventative efforts rather than end-of-pipe treatments. These improvements have real implications for local air quality and public health.
Awards: Moskowitz Prize for Best Paper on Socially Responsible Investing, 2020; Semi-finalist, John L. Weinberg/IRRCI Research Award; Best Paper in Corporate Finance, FMA European Conference, 2021; European Investment Forum Research Award, 2021; ICPM Research Award, Second Place, 2022