We study behind-the-scenes investor activism promoting environmental, social, and governance (ESG) improvements by means of a proprietary dataset of a large international, socially responsible activist fund. We examine the activist’s target selection, forms of engagement, impact on ESG performance, drivers of success, and effects on the targets’ operations and value creation. Target firms are typically large and visible, perform well, and have high liquidity (stock turnover) and low ESG performance. Engagement induces ESG rating adjustments: firms with poor ex ante ESG ratings experience a ratings increase after complying with the activist’s demands, whereas firms with high ex ante ESG ratings experience a ratings decrease following the revelation of their ESG problems. Activism that is focused on environmental and social issues is more likely to succeed if targets are ESG-sensitive (i.e., they have a strong ex ante ESG profile). Successful engagements boost targets’ sales. Risk-adjusted excess stock returns (with four-factor adjustment and relative to a matched sample of non-engaged firms) of successful engagements outperform those of unsuccessful engagements by 2.7%. Results are especially strong for firms with low ex ante ESG scores. Specifically, targeted firms in the lowest ex ante ESG quartile outperform matched peers by 7.5% in the year after the end of the engagement. Our results thus suggest that the activism regarding corporate social responsibility generally improves ESG practices and corporate sales and is profitable to the activist. Taken together, we provide direct evidence that ethical investing and strong financial performance, both from the activist’s and the targeted firm’s perspective, can go hand-in-hand together.

我们通过大型国际、对社会负责的激进基金的专有数据集研究幕后投资者激进主义，以促进环境、社会和治理 (ESG) 的改善。我们检查激进主义者的目标选择、参与形式、对 ESG 绩效的影响、成功的驱动因素以及对目标运营和价值创造的影响。目标公司通常规模大、知名度高、业绩良好、流动性高（股票周转率）和 ESG 业绩低。参与会导致 ESG 评级调整：事前 ESG 评级不佳的公司在遵守维权者的要求后评级提高，而事前 ESG 评级高的公司在 ESG 问题暴露后评级下降。如果目标对 ESG 敏感（即，它们具有很强的事前 ESG 特征），则专注于环境和社会问题的行动主义更有可能取得成功。成功的参与促进了目标的销售。成功参与的风险调整后的超额股票回报（通过四因素调整和相对于未参与公司的匹配样本）比不成功参与的高出 2.7%。对于事前 ESG 分数较低的公司，结果尤其强劲。具体而言，在参与结束后的一年内，处于事前 ESG 四分位的目标公司的表现优于匹配的同行 7.5%。因此，我们的结果表明，关于企业社会责任的激进主义通常会改善 ESG 实践和企业销售，并且对激进主义有利可图。综合起来，