Certified Environmental Social and Governance Analyst (CESGA) EFFAS Practice Test 2025 - Free CESGA Practice Questions and Study Guide

Shareholder activism refers to the proactive efforts made by shareholders to influence a company's actions and decisions by exercising their rights as owners. This can involve a variety of strategies, including voting on important issues during annual meetings, filing shareholder resolutions, engaging in dialogues with management, or even launching campaigns to sway public opinion and fellow shareholders towards a particular cause or change within the company.

The significance of shareholder activism lies in its ability to hold companies accountable for their practices, particularly regarding environmental, social, and governance (ESG) issues. Shareholders often seek to advocate for changes that they believe will increase company value, enhance corporate responsibility, or align with ethical considerations.

In contrast, the other options provided do not capture the essence of shareholder activism. Engagement of employees in policymaking focuses more on internal contributions rather than external influence by shareholders. Public relations campaigns are typically aimed at improving public perception and brand image, which is separate from the specific rights and actions of shareholders. Investment in green technologies pertains to capital expenditure and strategic direction rather than the act of shareholders influencing governance or operational decisions.