2. It makes sense for index investors to advocate for corporate policies that benefit their entire portfolio. They have incentives to encourage companies to minimize negative externalities (funny enough, some academics worry that index investors will discourage competition, and want to make them illegal). I’m not making any particular argument here, because if big investors explicitly acted on this line of reasoning it probably would become illegal, but I do find the thought interesting so I wanted to raise the point.
3. More people should be exploiting the clever hack! That’s actually how I got into this space :)
I had a couple other thoughts but they weren’t that relevant and my comment was getting too long.
1. Shareholder advocacy often combats displacement effects because the campaigns often target entire industries (see Farm Animal Investment Risk and Return or Boston Common Asset Management’s Banks and Climate Change work as examples).
2. It makes sense for index investors to advocate for corporate policies that benefit their entire portfolio. They have incentives to encourage companies to minimize negative externalities (funny enough, some academics worry that index investors will discourage competition, and want to make them illegal). I’m not making any particular argument here, because if big investors explicitly acted on this line of reasoning it probably would become illegal, but I do find the thought interesting so I wanted to raise the point.
3. More people should be exploiting the clever hack! That’s actually how I got into this space :)