Honour for research on investor engagement

A research paper on investor engagement on environmental and social issues, authored by 3 academics at the Centre for Endowment Asset Management (CEAM) at Cambridge Judge Business School, has been awarded Honourable Mention in the 2025 Moskowitz Prize announced by the Kellogg School of Management at Northwestern University.

The prize, celebrating its 30th year in 2025, is awarded annually to a research paper “best representing outstanding research on sustainable and responsible investing and the financial implications of responsible business practices in capital markets”, says the prize’s website. The prize is named for Milton Moskowitz (1932-2019), a prominent sustainable finance researcher.

The honoured paper from CEAM, titled Coordinated Engagements, was co-authored by Professor Elroy Dimson, Chairman of CEAM; Oğuzhan Karakaş, Associate Professor in Finance at Cambridge Judge and Co-Director of CEAM; and Xi Li, Associate Professor of Accounting at the London School of Economics and Political Science and Research Fellow at CEAM. The co-authors, who won the Moskowitz Price in 2012 for the paper Active Ownership, have worked together on responsible investing since 2008 and have consistently emphasised evidence-based approaches to sustainability.

First detailed evidence of investor environmental and social engagement on a global scale

“Coordinated engagements on environmental and social issues are becoming increasingly common in the institutional investment landscape,” says the conclusion of the Coordinated Engagements paper. “Our study provides the first detailed evidence of the nature and impact of these engagements on a global scale.

“We demonstrate that leadership plays a critical role in collaborative engagements, with institutions’ incentives to take on leadership shaped by their economic interests, resource bases, and geographic and cultural proximity to the target companies. A structured engagement strategy helps institutions achieve their objectives, increases future fund flows, and enhances the performance of target companies. Institutions with more ‘skin in the game’ compared to other investors are more likely to bear the costs of engagement and assume a lead role.”

Identifying the factors in successful shareholder engagement

Lloyd Kurtz, Founder of the Moskowitz Prize and a Visiting Scholar at the Kellogg School of Management, said of the Coordinated Engagement paper:

“This study is the culmination of over a decade of research on the efficacy of shareholder engagement. Of the 2 broad approaches responsible investors might take – engagement or divestment – only engagement offers the prospect of direct impact. But engagements are costly, and often fail.

“It is crucial to identify the factors associated with success, so that investors can allocate capital to the opportunities mostly likely to yield positive results. The authors demonstrate that choosing the right partners and following a structured process greatly enhance the probability of success, and document that successful engagements are associated with better financial outcomes.”