Fiduciary Duty in the 21st Century

Posted: 1 Feb 2016

Date Written: 2015


The report, based on interviews and analysis in 8 countries (the United States, the United Kingdom, Germany, Japan, Australia, South Africa, Brazil and Canada) argues that fiduciary duties (and equivalent terms) create positive duties on investors to integrate environmental, social and governance (ESG) issues into their investment processes and that failing to consider long-term investment value drivers, which include environmental, social and governance issues, in investment practice is a failure of fiduciary duty.

The report identifies a series of challenges to the incorporation of ESG issues into investment practice, including outdated perceptions about fiduciary duty and responsible investment, a lack of clarity within prevailing definitions of fiduciary duty about what ESG integration means in practice, limited knowledge of the evidence base for responsible investment, lack of transparency on responsible investment practices, processes, performance and outcomes, and weaknesses in the implementation, oversight and enforcement of legislation and industry codes on responsible investment.

Note: Prepared on behalf of: UN Global Compact, UNEPFI, Principles for Responsible Investment and UNEP Inquiry into the Design of a Sustainable Financial System.

Keywords: Fiduciary duty, responsible investment, ESG, environmental, social, governance

Suggested Citation

Sullivan, Rory, Fiduciary Duty in the 21st Century (2015). Available at SSRN: or

Rory Sullivan (Contact Author)

London School of Economics ( email )

Houghton St, London WC2A 2AE
London, WC2A 2AE
United Kingdom

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