By Maxime Bonelli, HEC Paris; Marie Brière, Amundi, Paris Dauphine University, and Université Libre de Bruxelles; and François Derrien, HEC Paris



Employee share ownership is a motivational tool and a savings vehicle for employees, as well as a major source of financing for companies. In many countries, companies and governments encourage this type of mechanism through discounts on the share price, an attractive employer matching contribution, or tax benefits.

As a result, employee share ownership is very widespread. In France, employees own around 3.5% of the share capital in the companies where they work,[1] compared with 8%[2] in the United States. According to the European Federation of Employee Share Ownership, nearly two out of five employees in France are shareholders of their company.

What motivates employees to invest in their company?

In addition to financial benefits (share price discounts, employer matching contributions, or tax benefits), the expected performance of company shares is a key driver. Furthermore, employees generally feel more familiar with their company and may think they hold more reliable information on it than they do on the rest of the market.

Loyalty to employers is also a driver. For example, employees of independent firms, who can thus invest directly in their division, invest 10% more in their company than employees of conglomerates, who are further from the decision-making centre.[3] Employee loyalty is particularly strong for companies in the event of a hostile takeover.

ESG performance and employee shares

In our paper, we examine whether a company’s environmental, social and governance (ESG) performance affects the motivation of its employees to become shareholders.

We use data on the savings plans of large corporations – collective savings schemes under French law that allow employees (and small company managers) to buy investment funds – managed by Amundi ESR in France and assess the investments of nearly 400,000 employees.

In particular, we assess how employees reacted to hearing negative ESG-related news involving their employer, at a time when they were able to subscribe for a new employee share ownership fund offered by the company.

Our findings

We identify a very strong link between a company’s ESG performance and employees investing in share ownership plans. Doubling the number of negative ESG incidents reduces the likelihood of employees investing in their employer’s shares by more than 15% and decreases the amount they invest by around €350.

Employees are highly influenced by negative news about their employer involving social aspects, especially incidents relating to working conditions in France. They have a much softer reaction to environmental controversies or corporate governance incidents.

Unlike the markets, employees do not appear to react very strongly to ESG incidents having the greatest impact on their employer’s share price; they are more likely to be driven by ESG policies or incidents that directly affect their everyday lives.

For example, they react more to local incidents, whereas the markets react identically to incidents in France or abroad. Similarly, employees react very strongly to incidents associated with working conditions, while human rights incidents such as the use of child labour have the greatest adverse impact on the markets.

These results indicate that employees do not react according to purely financial motivations, anticipating the negative impact of certain ESG incidents on their company’s financial performance and their investment portfolio.

It’s not all about the money

Today, employees are increasingly concerned by the corporate social responsibility practised by their companies. Recent studies have shown, for example, that employee retention rates are higher at companies with better corporate social responsibility practices.[4] We can also see lower pay (by around 9%) at companies operating in more sustainable sectors, because younger, more qualified workers accept lower salaries to work there.[5]

Our results suggest that employees are also highly sensitive to ESG policies when they invest in their employer’s shares. However, of the various aspects of ESG policy, those directly associated with working conditions have a stronger correlation with employee loyalty. This behaviour differs from that of institutional investors, which are particularly sensitive to environmental issues when making their investment decisions. Such focus on working conditions leads us to conclude that employees are driven more by self-interest than an altruistic concern about whether their company does good for the community or the planet.


This paper was presented at the PRI Academic Network Week 2022.



The PRI’s academic blog aims to bring investors insights from the latest academic research on responsible investment. It is written by academic guest contributors. Blog authors write in their individual capacity – posts do not necessarily represent a PRI view.