eCite Digital Repository

Sovereign Wealth Funds and Socially Responsible Investing: An Emerging Public Fiduciary

Citation

Richardson, BJ, Sovereign Wealth Funds and Socially Responsible Investing: An Emerging Public Fiduciary, Global Journal of Comparative Law, 1 pp. 125-162. ISSN 2211-9051 (2013) [Refereed Article]

Copyright Statement

Copyright 2013 Koninklijke Brill NV

DOI: doi:10.1163/2211906X-00102001

Abstract

The dramatic growth of sovereign wealth funds (SWFs) in recent decades has made them a significant phenomenon in global financial markets and raised the prospect of more enlightened investing that respects the environmental underpinnings of economic prosperity. Until the Global Financial Crisis of 2008, the movement for socially responsible investing (SRI) had been the only noteworthy dissenting voice to the traditional complacency about the financial economy’s wider impacts. That financial calamity not only unveiled a systemic malaise in the financial alchemy of the global economy but also highlighted its social and environmental sequelae. The rise of SWFs, several of which are legally mandated to practice SRI, gives hope that states may reclaim some public oversight over finance capitalism.

The purpose of this article is to investigate the governance of some SWFs with a view to assessing their capacity to contribute to environmental sustainability. As public financial institutions empowered by a broader conception of investment that takes account of social and environmental factors, SWFs have the incipient markings of ‘public fiduciaries’. SWFs could provide a novel way to interpolate the public trust environmental responsibilities of the state into the governance of the financial economy. This article focuses on the French and Norwegian SWFs, which arguably have the most comprehensive SRI practices of all SWFs. Both, however, have struggled to reconcile their ethical and financial mandates into a coherent investment philosophy. But their putative fiduciary responsibilities to society through an increasingly long-term investing perspective suggest a new normative direction to reconcile these tensions and to thereby help institutionalize the principles of intergenerational equity and sustainable development in the context of financial markets.

Item Details

Item Type:Refereed Article
Keywords:Socially Responsible Investing, Sovereign Wealth Funds, France, sustainability, environmental law, trust law, Norway, social investing
Research Division:Law and Legal Studies
Research Group:Law
Research Field:Environmental and Natural Resources Law
Objective Division:Law, Politics and Community Services
Objective Group:Community Service (excl. Work)
Objective Field:Environmental Services
Author:Richardson, BJ (Professor Benjamin Richardson)
ID Code:91820
Year Published:2013 (online first 2012)
Deposited By:Faculty of Law
Deposited On:2014-05-30
Last Modified:2017-11-06
Downloads:0

Repository Staff Only: item control page