Investor pressure reshapes global compliance

A new study finds that U.S. firms reduce imports by about 31.8% when their international suppliers face environmental and social (E&S) incidents. The effect is strongest for publicly traded companies under high E&S investor pressure, prompting them to shift sourcing across countries. These sharper trade reductions are linked to improved supplier E&S practices in later years and help restore trade relationships. Overall, the findings show that investor preferences can impose private costs on firms but also drive meaningful compliance improvements in global supply chains.

Source: adapted from Oxford Academic, January 2026.