Companies that disregard social and environmental concerns may be more susceptible to fines, boycotts, regulation, litigation, and reputational risk. They may find it difficult to acquire financing at competitive rates and attract and retain a talented workforce. As they fall further behind, it may become increasingly difficult and expensive to catch up, hampering their ability to thrive economically.

These companies also contribute to systemic risk. Systemic risk means that the action of some corporations may negatively impact other corporations. Climate change is a clear example of this: actions of oil and gas companies are linked to extreme weather events, wreaking havoc on supply chains and damaging crops and infrastructure. Companies depending on these supply chains are forced to take on new costs, translating into additional risk for investors.

For many people, risks to investments isn’t the most important issue, but rather the risk to the environment itself. Faced with an existential climate crisis, many people are using all means at our disposal - including voting rights as shareholders - to take action to limit global warming and address key social justice issues.