In between Two Societal Actors: The Social and Environmental Responsibilities of Sovereign Wealth Funds

Abstract

The objective was to determine the scope of responsibilities of SWFs in terms of social responsible investment (SRI). To meet the objective a definition of SWFs has been provided. Furthermore, the concept of socially responsible investment, the concept of fiduciary duty, and the concept of due diligence has been examined. The legal basis, governance structure and objectives of 38 SWFs were examined. Which private regulatory regimes these SWFs have adopted was also examined. These private regulatory regimes have been examined in depth. The author concludes that SWFs, due to their link to the state, are in a better position to become leaders in the sustainable investment field, and are arguably morally obligated to do so.

Keywords: Sovereign Wealth Fund, SWF, social responsible investment, SRI, fiduciary duty, due diligence, international law, UN Principles for Responsible Investment, UNPRI, Global Reporting initiative, GRI, UN Global Compact