Currently, there is much debate about the role that non-investor stakeholder interests play in the governance of public companies. Critics argue that greater attention should be paid to the interest of stakeholders and that by investing in initiatives and programs to promote their interests,...

We study the effect of environmental, social and governance (ESG) scores on the portfolio allocations of institutional investors. Using a unique data set, we find that institutional investor holdings (as measured by 13F filings) are strongly driven by the ESG quality of companies. While...