Propagation of E&S Issues in Firm Networks: Evidence from Shareholder Proposals in the US

This project explores how environmental and social (E&S) engagements spread out in a multilayer network of firms (geographic proximity, common ownership, director interlock, and industrial peers), based on an epidemiological model. Specifically, exploiting E&S shareholder proposals targeted at S&P 500 firms over 2005–2020, the earlier findings suggest that the basic reproduction number of the ‘contagion’, R_0, is less than 1. Firms that are central in the network have a greater propensity to be transmitted, consistent with the ‘too connected to escape’ hypothesis. Furthermore, large firms and firms with higher Big Three ownership have a higher tendency to be ‘infected’