It is clear that ESG has become an important factor in investment decision-making, but to what degree has it directly influenced the holdings of institutional investors and their engagement over proxy votes? What about the investment strategies of short sellers?
Our recent study examines the effect of ESG on the global equities lending market. By combining equities lending, ESG, and proxy vote data, we quantify the impact ESG has had on lending supply, short-selling demand, and institutional investor engagement.
Our findings suggest that ESG considerations are deeply embedded in the securities lending market and are growing in importance. The analysis identifies ways in which institutional investors can balance the revenue earned through securities lending with the pursuit of their ESG objectives.
Key findings from our study: