Multiple shareholding institutional investors and green governance of heavy‐polluting industries

Abstract Green governance in heavily polluting industries is crucial for achieving sustainable economic growth. By analyzing Chinese A‐share listed companies from these industries between of 2010 and 2021, we assess the influence of multiple shareholding institutional investors (MSII) on a company's environmental performance. We find that MSIIs can improve environmental performance, highlighting their positive role in green governance. Further analyses reveal that this green influence stems from three key effects: supervisory oversight by principal shareholders, managerial incentives, and knowledge transfer. Consistent with the risk‐averse hypothesis, our study also suggests that MSIIs could drive the green transformation of heavy‐polluting industries out of risk aversion.