Skip to main content
About HEC About HEC Faculty & Research Faculty & Research Master’s programs Master’s programs MBA Programs MBA Programs PhD Program PhD Program Executive Education Executive Education Summer School Summer School HEC Online HEC Online About HEC Overview Overview Who
We Are Who
We Are
Egalité des chances Egalité des chances HEC Talents HEC Talents International International Campus
Life Campus
Sustainability Sustainability Diversity
& Inclusion Diversity
& Inclusion
Stories Stories The HEC
Foundation The HEC
Coronavirus Coronavirus
Faculty & Research Overview Overview Faculty Directory Faculty Directory Departments Departments Centers Centers Chairs Chairs Knowledge Knowledge Master’s programs Master in
Management Master in
Master in
International Finance Master in
International Finance
& Masters MS
& Masters
Ecole Polytechnique
-HEC programs Ecole Polytechnique
-HEC programs
programs Dual-Degree
students Exchange
Certificates Certificates Student
Life Student
MBA Programs MBA MBA Executive MBA Executive MBA TRIUM EMBA TRIUM EMBA PhD Program Overview Overview HEC Difference HEC Difference Program details Program details Research areas Research areas HEC Community HEC Community Placement Placement Job Market Job Market Admissions Admissions Financing Financing Executive Education Executive Masters Executive Masters Executive Certificates Executive Certificates Executive short programs Executive short programs Online Online Companies Companies Executive MBA Executive MBA Infinity Pass Infinity Pass Summer School Youth Programs Youth Programs Summer programs Summer programs HEC Online Overview Overview Degree Program Degree Program Executive certificates Executive certificates MOOCs MOOCs Summer Programs Summer Programs


Do Employee Shareholders Care about their Employers' ESG Performance?

Published on:

The Environmental, Social and Governance (ESG) performance of companies has become an increasingly significant factor influencing investor sentiment in recent years. But does this hold for all investors? A recent study by HEC Paris Finance researchers Maxime Bonelli and François Derrien, with Marie Brière of Amundi Asset Management, Paris Dauphine University and Université Libre de Bruxelles, investigated the response of French employee shareholders to ESG performance through their personal investment behavior in their employers’ share schemes. The results show that these employees have a distinctly different response to the ESG performance of their employers: one that is focused on their personal welfare.

business people scrutinizing a document in a meeting room_cover

Photo Credit: Robert Kneschke on Adobe Stock

Employee shareholders can represent a significant investment group in certain companies. In the US, employees own 8% of the stock in their companies. In France, around 51% of all employees have access to employee stock schemes and in 2018 their shareholdings represented approximately 3.5% of the total capital of French firms. But to invest, do employees need to love their company and approve its ethical performance?

Growing ethical concerns for investors – but what about employees?

Environmental, social, and governance (ESG) standards and the performance of companies in relation to those standards help socially conscious investors screen their investments. Such considerations are becoming increasingly important to investors. But we wanted to find out if this is true for all elements of the investor community, particularly for employee investors.

In theory, employee share ownership should be a motivational tool for workers as well as a useful savings instrument for the employee and a potential source of finance for the company. Such schemes are widely encouraged through tax breaks and other government incentives. 

Our quest was to better understand to what extent the ESG performance of a firm affects its employees’ loyalty. So, we decided to analyze the willingness of employees to invest in their business’s stock as a function of its ESG performance.

Our hypothesis was that an employee’s decision to buy the stock of their employer reflects their satisfaction with the firm’s policies. Increased employee satisfaction leads to increased employee loyalty and, this in turn, leads to an increased willingness to invest in the company through stock ownership rather than other investments.

To explore the link between employees’ investment decisions and the ESG practices of their employers, we were able to access an anonymized dataset on French employees enrolled in company-sponsored savings plans. The data was supplied from Amundi Asset Management, the leading asset manager for employee savings plans in France that manages some €66.8 billion in employee assets. It enabled us to analyze the monthly investment behavior of more than 380,000 employees.

To measure the ESG performance of the companies, we collated ESG incidents recorded in the RepRisk database. RepRisk screens media, stakeholders and third-party sources for news and information related to companies’ ESG practices providing daily counts of negative ESG news at the company level. The ESG data is also classified in distinct ESG issue categories. Essentially, we used the RepRisk negative news count as a proxy for negative ESG practices and then investigated how this relates to the investment decisions of employees.

Negative ESG news turns employee investors off

Our first finding was that employees are significantly less likely to invest in their company, or invest considerably less, following negative ESG incidents. Our analysis of the data, when controlling for other factors such as cyclic economic and company characteristics, indicates that the likelihood of an average employee investing in their company stock drops by eighteen percentage points (46% relative to the full sample mean) when the number of negative ESG incidents at the company doubles over the year.


Employees are significantly less likely to invest in their company, or invest considerably less, following negative ESG incidents.


In cash terms that is an average individual reduction in investment of €377 over the year. This is economically significant and large relative to the typical annual employee investment in their company’s stock of around €500.

But we also wanted to go a little deeper and see if we could better understand the motivation behind these investment decisions. Fortunately, the granular nature of the RepRisk ESG classifications enabled us to understand the factors more precisely behind investment behavior and to relate it to the three classes of ESG performance: Environment, Social and Governance. The results surprised us.

Me, me, me?

We found that these investment decisions did not respond to governance-related events, and, in some cases, even appeared to respond positively to negative environment-related incidents. With further analysis, this astonishing result was largely driven by employees working in more polluting sectors, whose loyalty with respect to their employers appears to increase following negative environmental incidents.

Overall, we found that the satisfaction and loyalty of employees is unrelated to the environmental performance of their companies. We also found that employees who tend to invest in Socially Responsible Investment funds and younger employees – both factors associated with greater environment consciousness – are only slightly more sensitive to negative ESG incidents involving their company.

Actually, the most important drivers of investment decisions were related to social-related reports such as overwork, low remuneration, spying on workers, harassment, employee suicides, or discrimination against trade union membership.


Most important drivers of investment decisions were related to social-related reports such as overwork, low remuneration.


Among these social incidents, those relating directly to the employee’s own working conditions were the most likely to influence investment decisions. We also found that French employees respond much more to such social events occurring in France than those happening in the same company but abroad. 

Our findings suggest that employees’ decisions are driven mostly by ESG practices that directly affect their everyday life. Personal benefits are the key determinants of employee satisfaction and loyalty with respect to their employer. Employees, it seems, are not altruistic, but focus on their own self-interest rather than wider ESG factors when considering their investment decisions.

Contrary to other studies and current views of investor decision-making, our empirical evidence suggests that overall investors tend to monitor the ESG performance of companies, and this is a significant factor in their investment decisions. However, a specific class of investors, the company employees, clearly have a tight focus only on their own well-being.

With employee activism emerging as an important phenomenon, it is important to understand whether employee interests are aligned with those of shareholders and other key stakeholders. These results can improve our understanding of the trade-off faced by firms between the benefits associated with employee shareholding and any potential tension this could create with other dimensions of the business.

We will be undertaking further research to explore this phenomenon more deeply.


The main driver of employees’ investment decisions regarding ESG, at least in their own company’s stock, is their own local working conditions and well-being. This behavior is different from the one of institutional investors, and should be taken into account by employers in their tradeoffs. This research will be continued through a forthcoming survey that is being developed at HEC and will be sent to employees to obtain further substantive evidence on their investment decisions and the motivation behind them.


The researched used unique data from company-sponsored savings plans in France from 2015 to 2018. This data was correlated with the ESG performance of the company as reported via the RepRisk ESG practice database to assess the relationship between employee investment decisions and ESG factors.
Based on an interview with Maxime Bonelli and his working paper, “Altruism or Self-Interest? ESG and Participation in Employee Share Plans” co-authored with Marie Brière of Amundi Asset Management, Paris Dauphine University and Université Libre de Bruxelles, and François Derrien of HEC Paris, Department of Finance. The paper was written in July 2022 and can be accessed here.

Related content on Finance

European Central Bank at Frankfurt


Implicit Guarantees in the Onset of the Euro Area Countries’ Debt Crisis

By Eric Mengus

Social Innovation
Addressing the "S" Demands of ESG - Editorial
Eloic Peyrache - HEC
Eloïc Peyrache
Professor, Dean
Thinking Deglobalization
Guillaume Vuillemey - news vignette- HEC Paris
Guillaume Vuillemey
Associate Professor
debt - vignette

How Governments’ Heavy Reliance on Bank Debt Affects Firms

stock market vignette

Future of Finance: How Are New Technologies Reshaping the Sector?

By Thierry Foucault