The equity lending supply of brown firms is concentrated in one-fourth of mutual fund shareholders, two-thirds of which are passive. I construct a novel dataset of passive fund equity lending spanning 2010 to 2024 to document the securities lending channel of sustainable investing. Pro-environmental lenders (PELs) tilt their lending supply toward brown positions, facilitating short selling as a market-based governance mechanism that disciplines brown firms. Consistent with non-pecuniary motives, PELs are predominantly managed by politically liberal managers and UNPRI signatories. PELs do not forgo voice: they recall brown shares when shareholder meetings feature E&S proposals and vote in favor. At the firm level, PEL ownership relaxes short-sale constraints, improves the price informativeness of brown stocks, and is suggestive of long-term improvements in their environmental practices. These findings highlight how passive funds express non-pecuniary preferences by forming targeted securities lending habitats.