PhD Defence: Martin Fuchs

Abstract

In public debates, sustainable investing has been portrayed as both a saviour to increasingly unsustainable economic systems and a dangerous ideology attacking the stability and prosperity of these very systems. This dissertation advances our understanding of the actual impact of sustainable investing, offering nuance to simplified arguments in charged debates on a heated topic. Study 1 of this dissertation is a literature review that synthesizes insights on the different pathways through which this impact can materialize. The empirical chapters of this dissertation look at collaborations between financial institutions and how joining forces affects how investment firms try to influence the policies and practices of companies. Study 2 is a multiple case study that seeks to explain why, despite their theoretical promise, shareholder collaborations often fall short of expectations. This study finds that incumbent investors are hesitant to move forward with engaging their portfolio firms, unless they can clearly formulate a business case for tackling any focal sustainability issue. Yet, this study also finds that activist investors can prevent delays in the collaborative process by providing knowledge pertinent to both sustainability issue and the business case for it at the right moment in time. An important implication of this study is that activist investors can play an outsized role in shareholder collaborations that goes beyond their relative importance and resource control within the financial industry. Study 3 further strengthens this finding, as it addresses the role that incumbent and activist investors play in defining the objectives of collaborative shareholder engagements.