Investor Activism and the Green Transition

About the seminar

We model impact activism, where activist investors promote firms’ green transitions through engagement. Activism faces 2 intertwined challenges. First, an internal free-rider problem, where insiders and activists free-ride on each others’ transition efforts, can render activism ineffective or even counter-productive. Second, an external free-rider problem, where activism-driven gains are reflected in the stock price and accrue to passive investors, prevents activists from investing or tilts investments towards firms that can transition independently. Our analysis highlights how factors such as investor preferences, carbon taxes and firms’ ownership structure, whether public or private, shape the effectiveness of activism.

Speaker bio

Sebastian Gryglewicz is a Professor of Finance at Erasmus University Rotterdam and a Research Fellow at Tinbergen Institute. He conducts research in corporate finance and financial intermediation. His recent research focuses on activist investors, private equity, managerial incentives and mergers & acquisitions. His work has been published in top-tier journals, including the Journal of Finance, the Journal of Financial Economics and the Review of Financial Studies.

Register

No registration required. For any queries about the seminar, please contact Bet Brooke.