Abstract
Shareholder activism is a key driver of corporate change. Although it has become a prominent organizational phenomenon, most research has only looked at the relationships between activists and firms, providing a limited understanding of the overall process and its actors. This study takes a more comprehensive system‐level approach of shareholder activism, examining the connections between shareholder activists, firms and stakeholders. In the context of European shareholder activism on climate issues, we explore how shareholder activists collaborate with stakeholder systems, including organizational stakeholders, stewardship and climate experts to frame and align their collective actions within coalitions. We conceptualize shareholder activism as a dynamic process structured around three mutually inclusive frames: disclosure‐seeking, financial materiality and double materiality. The disclosure‐seeking frame is motivational, whereas the financial and the double materiality frames are diagnostic and prognostic, respectively. Our findings show that collective actions of shareholder activists produce ripple effects between frames at the systems level. We observe a clear shift towards the financial and double materiality frames, indicating a growing alignment between financial interests and environmental impact. These results support the need for a broader system‐level view of shareholder activism that can be applied to other environmental issues.