Institutional investors, networking, and sustainable environmental performance

Gupta, Pratik

Thesis

Institutional investors, networking, and sustainable environmental performance

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Creator

Gupta, Pratik

Rights statement

Strathclyde Thesis Copyright

Awarding institution

University of Strathclyde

Date of award

2025

Thesis identifier

T17472

Person Identifier (Local)

202183803

Qualification Level

Doctoral (Postgraduate)

Qualification Name

Doctor of Philosophy (PhD)

Department, School or Faculty

Department of Accounting and Finance

Abstract

This Ph.D. thesis, comprising two empirical chapters, assesses the effect of institutional investors on a portfolio company’s decisions about sustainability. I focus on sustainability outcomes that capture the actual performance of companies. In the first empirical study, I employ a setup of MSCI-ACWI index addition that increases institutional ownership through benchmarking and diversification for companies across forty-six countries worldwide. In the second empirical study, I employ a setup of the distance between institutional investors, which is an immutable factor to determine the strength of investor connections. To examine whether Institutional Ownership (IO) mitigates ESG-Misbehavior (ESGMVR), I examine two hypotheses based on two questions. Do cross-sectional and temporal variations in IO provide insight into future ESG-MVR variations for their portfolio firms? Second, does the impact of IO on ESG-MVR vary depending on the investor type? With a battery of robustness tests, I show that IO mitigates ESG-MVR. This empirical chapter illustrates that institutional investors (II) help promote positive sustainability practices and manage future cases of ESG-MVR. In my second study, I investigate the impact of well-connected II on the portfolio company’s carbon emissions. I examine three hypotheses based on the question: do wellconnected II influence carbon emissions? How does well-connected II prioritize mitigating carbon emissions while promoting cohesion among their counterparts? I run a battery of robustness tests and show that well-connected II reduces carbon emissions. This empirical chapter illustrates that well-connected II promote sustainability practices through active monitoring and activism. In my thesis, I emphasize that investors demonstrate responsibility in their investment decisions and prioritize the sustainable performance of their portfolio companies, which significantly influences their decision-making process.

Advisor / supervisor