This paper estimates the effect of sustainable shareholder proposals on firm’s investments. We study the real estate industry where investments are sporadic and occur following depreciation waves. Using unique micro-data tracking investments in all public US commercial real estate properties over the past two decades, we find that sustainable shareholder proposals effectively steer firms to initiate tangible and long-lasting sustainable retrofits. However, proposals are ineffective or impair such investments when they do not coincide with reinvestment periods, or investors vote down the proposal. SEC restrictions in combination with the asset depreciation waves, create random variation enabling us to identify the impact of the shareholder proposal.
