This paper tests whether very diversified and patient investors, also known as universal owners, tend to vote in favor of shareholder resolutions instructing corporations to reduce or communicate on the negative externalities they produce.
Our sample includes 213 US fund families that voted on 13,108 different shareholder resolutions at 2,352 companies over the period from 2013 to 2016. We find that, contrary to the common ownership logic, universal owners’ support for issues related to externalities is lower than the one of otherwise similar fund families.
Instead, support is positively associated with the proportion of socially responsible investment funds in the family. We discuss various practical implications of our results.