Sustainable investors can use “field-building”

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Here’s a note from Mark DesJardine about this study:

After reviewing nearly 4,000 papers on sustainable investing, my coauthors and I have uncovered a new way that sustainable shareholders can have impact: field-building.

Prior studies show that sustainable investors have impact mostly by “portfolio screening” (exit) and “shareholder engagement” (voice). Adding to these strategies, field building occurs when shareholders try to make companies more sustainable by influencing the fields in which companies are embedded, for example, by stigmatizing certain business activities or by establishing voluntary reporting standards for companies.

This is an important discovery because it extends the repertoire of strategies investors can use to create impact, beyond portfolio screening and shareholder engagement. The Journal of Management Studies article is open access, so check it out and comment.