Climate Change and Mutual Fund Voting on Climate Proposals

This paper explores whether investors’ personal experience with climate change affects their voting behavior on climate change–related proposals. We find that fund managers exposed to abnormally hot temperatures are significantly more likely to support climate proposals. We further show that the effect is persistent. We observe significant heterogeneity in the effect of hot temperatures, depending on firm-level climate risk, the quality of the proposals, fund investment strategy, and prior awareness of climate change. Fund managers’ personal experience with climate change matters for the outcome of climate proposals as it affects the aggregate support they receive. Fund managers exposed to abnormally hot temperatures are also more likely to divest from stocks with greater exposure to climate change. This paper was accepted by Camelia Kuhnen, finance. Funding: R. Michaely acknowledges financial support from the National Nature Science Foundation of China [Project 72332002]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2022.03733 .