Empowered by social media, individual investors who once had little say over corporate behavior today have influence through their membership in pension plans. The nature of this shift, though little studied to date, is now the focus of a new SSHRC-funded study led by the Telfer School’s Darlene Himick.
Professor Himick notes that there has been a rapid growth in Canadian funds and assets managed according to environmental, social and governance (ESG) factors in recent years. Over a similar period the Internet “has motivated individuals to act and changed the possibilities for them to organize as shareholders.” But how this engagement actually takes place is unclear, even as a number of important secondary questions remain unexplored, Himick notes. For example: do individuals accept the framing of issues (e.g., climate change) as risks in the way that institutional investors have? Do institutional and individual investors differ in thinking about risk?
Himick explains that institutional investors who have wanted to, for example, apply pressure for more climate-change disclosure from a company, have long had this ability, but the same cannot be said for individuals. “Only now do we see individuals on the verge of organizing around the specific intent to reconceptualize risks in order to effect environmental and social changes.
“By investigating how individual investors organize as activist shareholders, we begin to see them as actors who can access and use information to critically engage with the corporations in whom they have placed their future retirement monies.”