We examine the joint effects of shareholder engagement—coordinated as part of the Climate Action 100+ (CA100+) initiative—and governmental climate regulation on firms’ carbon emissions intensity. Our theory and findings support the standalone effects of firms’ voluntary responses to investor pressure and mandatory pressure from climate regulation. Notably, we find that these two forms of pressure are complementary, with firms facing both shareholder engagement and regulatory pressure reducing their subsequent emissions intensity on average. Furthermore, we test and find supportive evidence for spillover effects arising from board ties between firms targeted by CA100+ and connected non-targeted firms, which are likewise reinforced by the prevalence of government climate regulatory pressures. By demonstrating the additive effects of these different sources of pressure on firms’ environmental impacts, we contribute to the corporate governance and stakeholder literatures, while also recognizing the complexity of normative pressures and interrelationships between actors that are key contributors to climate-related challenges and solutions.
