Title: Sovereign wealth funds, shareholder activism and socially responsible investing: impact on corporate governance and sustainability

Authors: Wei Yin

Addresses: School of International Law, Southwest University of Political Science and Law, 301 Baosheng Rd., Yubei District, Chongqing 401120, China

Abstract: Institutional shareholder activism is usually discussed within the business. Sovereign wealth funds (SWFs), as long-term institutional investors, are stepping into the sustainable investment movement and corporate governance discussion. But studies, from the regulatory perspective, that discuss the SWFs' shareholder activism are scant. As shareholders of investee companies, SWFs theoretically can exert activism to influence corporate performance, while their inherent feature poses challenges to regulators of host countries. This paper aims to explore the story of SWF activism, and its impacts on corporate governance and business sustainability. It analyses approaches that SWFs can utilise and the status quo of SWF activism. The issues and benefits of SWF activism are briefly assessed. Regulatory supports concerning social activism, responsible investing and transparency are analysed. It suggests that to ensure the benefits of SWF activism and reduce concerns, it is necessary to promote soft law and regulatory measures regarding transparency and SWFs' shareholder rights.

Keywords: sovereign wealth funds; shareholder activism; corporate governance; social activism; financial activism; socially responsible investing; business sustainability; institutional shareholder activism; transparency; Santiago Principles; voice activism; exit activism.

DOI: 10.1504/IJGE.2018.097495

International Journal of Green Economics, 2018 Vol.12 No.2, pp.111 - 126

Received: 28 Jul 2018
Accepted: 08 Nov 2018
Published online: 24 Jan 2019 *

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