The Real Effects of Environmental Activist Investing

Toxic chemical releases at targeted firms fall 13% after environmental activist campaigns.

S. Lakshmi Naaraayanan, Kunal Sachdeva, Varun Sharma

Review of Financial Studies, forthcoming (published online August 2026)

Toxic chemical releases at targeted firms fall 13% after environmental activist campaigns.

We examine how environmental activist investors drive firms to reduce their toxic releases, greenhouse-gas emissions, and cancer-causing pollution. Plants of targeted firms reduce their total toxic chemical releases by 13% on average through preventative efforts rather than end-of-pipe treatments. These improvements have real implications for local air quality and public health.

Awards: Moskowitz Prize for Best Paper on Socially Responsible Investing, 2020 · Semi-finalist, John L. Weinberg/IRRCI Research Award · Best Paper in Corporate Finance, FMA European Conference, 2021 · European Investment Forum Research Award, 2021 · ICPM Research Award, Second Place, 2022

Paper Data ECGI
Cite
@article{naaraayanan2026real,
  title={The Real Effects of Environmental Activist Investing},
  author={Naaraayanan, S. Lakshmi and Sachdeva, Kunal and Sharma, Varun},
  journal={Review of Financial Studies},
  year={2026},
  doi={10.1093/rfs/hhag073},
  note={Advance article, hhag073}
}

All research