["Strategic Management Journal, EarlyView. ", "\nAbstract\n\nResearch Summary\nCan environmental, social, and governance (ESG) investors hold businesses accountable for their environmental impact? Extending institutional theory and analyzing a global sample of firms from 2006 to 2019, we argue that, in response to ESG investors' institutional pressures, firms may intensify pollution outsourcing to suppliers as a sophisticated form of corporate decoupling. We further theorize and find suggestive evidence that this effect is less salient and sometimes reversed when ESG investors can help firms access green technologies and when they have more direct purview of firms' suppliers. We employ investor‐level acquisitions as quasi‐exogenous shocks and additionally analyze a separate firm–supplier sample to support the hypotheses with largely consistent results.\n\n\nManagerial Summary\nEnvironmental, social, and governance (ESG) investors are increasingly expected to act as private regulators, using ownership stakes to steer companies toward sustainability. Yet, looking only at whether a focal firm cleans up its own operations can be misleading because it ignores what happens in the broader supply chain. Using global firm data from 2006 to 2019, we find that companies under strong ESG investor pressure generate lower direct emissions but may shift pollution to suppliers, leaving the combined emissions unchanged. We also provide suggestive evidence that this outsourcing is reduced and sometimes can become reduced when investors can help firms adopt green technologies and directly oversee supplier practices.\n\n"]