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29 Colum. J. Eur. L. 83 (2023)
Institutional Investors' Non-Financial Reporting: Should the EU Regulatory Framework Be Updated?

handle is hein.journals/coljeul29 and id is 87 raw text is: INSTITUTIONAL INVESTORS' NON-FINANCIAL REPORTING: SHOULD THE EU REGULATORY FRAMEWORK BE UPDATED? Raffaele Felicetti* Abstract The main goal of this empirical research is to identify the trends in the European Union as regards the exercise of shareholder voice on environmental and social ('E & S) matters to then assess, in light of the empirical evidence, the current EU regulatory framework mandating the disclosure of some non-financial information. The topic has gained even more traction following the European Green Deal and the recent publication of the EU Commission's Strategy for a Sustainable Transition. I focus on the Big Three (BlackRock, Vanguard, and State Street Global Advisors SSGA), which have increasingly committed to caring about E & S issues and which are taken in the Paper as the typical example of modern, highly diversified institutional investors. While the Big Three's E & S commitment has received some scrutiny in the United States, in Europe it did not traditionally receive much academic attention so far. In this paper, I create a unique dataset of 83 European companies and assess the Big Three's aggregate and individual ownership in such companies. I then collect data on how the Big Three promoted their E & S agenda in 2020 in such companies. I find that E & S issues are discussed overwhelmingly through private engagements, while are never raised through the submission of shareholder proposals or by voting on other shareholders' E & S proposals. After identifying some possible explanations for these trends, I then demonstrate that the extent to which an institutional investor makes use of private engagements seems to be a variable that is independent (wholly or, in any case, to a large extent) of the support that it gives to other shareholders' E & S proposals. In other words, institutional investors would arguably continue to make extensive use of private engagements regardless of whether, unlike what is happening today in the EU, the other shareholders started submitting E & S proposals and the * S.J.D. Candidate, Harvard Law School, and Research Fellow, Harvard Program on Corporate Governance. Email: Rfelicetti@sjd.law.harvard.edu. The author would like to thank Alperen Gdzhigol for helpful comments on early drafts of the paper. 83

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