Emma Sjöström

We examine how the authority of investors to speak about climate change with corporations is established. Leveraging the ‘communication as constitutive of organisations’ (CCO) perspective, we analyse who speaks on behalf of whom (or what) in shareholder engagement on corporate carbon emissions. Based on access to private dialogues between an engager acting on behalf of a pool of investors with 20 utility corporations, we identify how three authoritative personae—that of diplomat, advocate, and coach—convey climate change concerns. We find that the mirroring of these authoritative personae by corporations may lead to deliberation, evasion, or rejection of the suggested courses of action. We theorise how relational authority is communicatively constituted in shareholder engagement through a process of mirroring and switching between authoritative personae. Our framework contributes to the study of CCO and relational authority by highlighting how meta-figures are used by external actors in an attempt to author appropriate corporate actions. We discuss the implications of our framework for the role of shareholder engagement in current attempts at greening financial capitalism.

Many investors and companies around the world now agree that sustainability can directly influence the evaluation of companies’ current and future financial performance. For this reason, it has become central to understand how sustainability—or environmental, social and governance (ESG) issues1 —can be integrated into financial analysis. This is a task not just for financial analysts, however, but also for the portfolio managers who buy such analysis from sell-side researchers, as well as the officers who handle investor relations at the listed companies that are the target of financial analysis and investment. It is therefore important to study the interaction between these three actor groups, in order to better understand the drivers of and challenges for integrating ESG issues into financial analysis. This report extends the results of a 2019 study by Swesif, Stockholm School of Economics (SSE) and the Stockholm Environment Institute (SEI) on the theme of integrating long-term perspectives into financial analysis.2 Both reports include all three actor groups. While the first study was survey-based, and addressed ESG only implicitly through its focus on long-term issues, this report provides more context by using interviews to document how the different actors view the integration of sustainability into their work. To this end, we draw on 30 interviews with Swedish financial actors: 10 from the sell-side, 10 from the buy-side and 10 from the corporate side.Our study makes four main contributions: • First, our study indicates that there has been a notable increase in sell-side analysts’ focus on sustainability in the past two years. We identify three major drivers of this change: investors’ growing interest in ESG issues, the EU taxonomy on sustainability activities, and the increased attention paid to and understanding of the financial relevance of ESG. • Second, while previous studies have emphasised that financial analysts’ short-termism may have spurred markets to overlook sustainability risks, we found that participants in our study did not view short-term pressures as a major impediment. They do however highlight the need to balance shortterm and long-term issues in order to better integrate ESG issues. The quarterly earnings call is a typical setting where companies often struggle to frame ESG issues in a financial context. • Third, quantifying ESG aspects is perceived as a major challenge when integrating ESG issues into financial analysis. Our results show that initial progress has been made as some financial actors do factor either ESG scores or materiality assessments into their financial valuations. The EU taxonomy and the harmonisation of other reporting standards are perceived as important tools for further supporting these advances. Many interviewees, however, insisted that there is also ample room for qualitative assessments of ESG issues in financial analysis. • Lastly, our findings highlight the importance of access to sufficient and high-quality ESG-related skills and resources. Most of our interviewees rely on an important variety of sources for ESG information, but largely learn how to make use of these sources “on the job”. We find that dedicated ESG teams and the involvement of companies’ sustainability officers provide important support, especially in the early phases of a learning curve.

In this chapter, we explore the motivations of sustainability-oriented investors for directing capital towards sustainable production and consumption practices. Whereas in public communication it is often framed in financial terms, i.e. that a focus on sustainability is a way to generate long-term shareholder value, some investors may also be motivated by “doing good” and by an urge to contribute to a sustainable future. These two rationales build on different logics, and may produce different strategies on part of the investors, and have different outcomes. The financial logic has a theoretical or mind-to-world direction of fit, and it requires investors to adopt a reactive and hypothetical stance towards sustainability issues. The moral logic, on the other hand, has a practical or world-to-mind direction of fit, and it requires investors to adopt a proactive and categorical stance to sustainability issues. In this chapter we reflect on what this might entail for sustainable production and consumption.

The 2020 COVID-19 pandemic and social and economic responses are amplifying social inequalities and hampering strategic, long-term investments into sustainability by firms and governments. Researchers affiliated with Misum (Mistra Center for Sustainable Markets) discuss how the global response to the pandemic has slowed progress toward the Sustainable Development Goals adopted by the United Nations in 2015. The article emphasizes that low-income groups are most affected by the economic consequences of the coronavirus crisis, that the pandemic is reducing the ability and willingness of firms to make strategic investments, and that companies and governments need to deploy resources that ensure a sustainable recovery from the crisis.

Abstract [en] This article advances the idea that shareholders who seek to influence corporate behaviour can be understood analytically as norm entrepreneurs. These are actors who seek to persuade others to adopt a new standard of appropriateness. The article thus goes beyond studies which focus on the influence of shareholder activism on single instances of corporate conduct, as it recognises shareholders' potential as change agents for more widely shared norms about corporate responsibilities. The article includes the empirical example of US internet technology companies who, in their Chinese operations, face conflicts of norm systems in regard to freedom of expression on the internet. Shareholders have been active in seeking to persuade these companies to adopt a norm of adhering to global standards for human rights over restrictions implied by authoritarian regimes to which they deliver services.

This paper revolves around Swedish consumers’ perceptions of a TV marketing campaign informing about the certification of Chiquita bananas by the non-profit organization Rainforest Alliance. The certification means that Chiquita bananas have become more environmentally friendly, though not as friendly as to be marketed as ecological in Sweden, making this an interesting case to study. Through interviewing and surveying banana purchasers in the store, it was found that awareness of the campaign had a positive influence on the chain of advertising effects, but that more ecologically aware consumers, as well as consumers more sceptical to advertising, were less inclined to purchase, and had a more negative attitude to, the Chiquita brand. However, there was no relation between ecological awareness and ad scepticism in this sample. Implications for the marketing of (more or less) green products are discussed.