Shareholder Proposals on Greenhouse Gas (GHG) Disclosure and Target-setting and their Association with Firm ESG Performance and Emissions Performance

 Mechanisms of shareholder activism advance investor and market influences on firm behavior, and they continue to be important in light of evolving ESG landscapes. This research investigates the impact of shareholder proposals regarding greenhouse gas (GHG) disclosure and target-setting on firm Environmental Performance, specifically measured through six different alternative dependent measurements of ESG Performance and Emissions Performance. The research employs Difference-in-Differences (DiD) regressions to analyze a sample of 286 GHG-related proposals in 194 North American firms between 2015 - 2024. Proposals were codified and categorized by type and by voting outcome. The results demonstrate that the receival of a GHG proposal is associated with a statistically significant decline in firm ESG scores, suggesting increased transparency and disclosure may temporarily reduce ESG ratings. However, the study finds limited evidence that proposals lead to meaningful reductions in firm emissions. A notable exception is observed where firms whose proposals were voted upon experienced a statistically significant decline in Scope 1 emissions. Cross-sectional tests reveal that target-setting proposals tend to yield stronger associations with emissions reductions than disclosure-based proposals (weak significance), and that proposal voting outcomes can play a role in determining effectiveness under conditional circumstances. These findings underscore the conditional nature of shareholder proposal outcomes and expand upon existing literature by isolating the effects of GHG proposals as a distinct subset of ESG activism. The study contributes to growing literature on ESG shareholder engagement, and it also highlights the importance of proposal type, firm disclosure dynamics, market pressures, and investor activism in inciting firm-level changes.