We are happy to announce the publication of a new study. The study "Institutional Ownership and Corporate Sustainability Performance—A Meta-Analysis", co-authored by Dr. Jan Endrikat (PostDoc at the chair), Prof. Dr. Rüdiger Hahn and Dr. Henrik Scherer, got published at Business Strategy and the Environment (https://onlinelibrary.wiley.com/doi/full/10.1002/bse.70389).

We are happy to announce that the study "Institutional Ownership and Corporate Sustainability Performance—A Meta-Analysis", co-authored by Dr. Jan Endrikat (PostDoc at the chair), Prof. Dr. Rüdiger Hahn and Dr. Henrik Scherer, got published at Business Strategy and the Environment (https://onlinelibrary.wiley.com/doi/full/10.1002/bse.70389). The study brings clarity to the questions whether institutional investors actually make companies more sustainable, and whether they preferably invest in companies that already perform well in sustainability. It does so by analyzing 116 empirical studies with data from more than 930,000 company observations worldwide (link to the full paper is in the comments)! Using a comprehensive meta-analysis, we find strong evidence for a positive relationship running in both directions. Companies with a higher share of institutional investors tend to improve their sustainability performance over time, and companies that already perform well in sustainability tend to attract more institutional investors. In other words, institutional investors reward sustainability, and companies respond to their pressure by becoming more sustainable.

We also show that the national context matters. In countries with strong shareholder rights, the positive link between institutional ownership and sustainability performance is also stronger because investors have more influence over corporate decisions. In contrast, a high regulatory burden weakens this relationship, as companies focus more on compliance and have less flexibility to react to investor expectations. Another important insight is that the relationship has grown stronger in recent years, as sustainability and ESG topics have become more salient for markets, society, and regulators. Interestingly, we do not find meaningful differences between long-term and short-term institutional investors, suggesting that the dominant market trend toward integrating sustainability considerations affects many investor types alike.