Abstract

There is an increasing consensus that, beyond financial returns, investors should also consider the environmental and social impacts of their business activities. Major institutional investors currently are entering the realm of socially responsible investment (SRI), which incorporates environmental, social, and governance (ESG) factors into decision-making based on internationally recognized standards and principles. As influential institutional investors, sovereign wealth funds (SWFs) have attracted attention worldwide and raised concerns from host countries. In this context, questions may arise, such as: Whether and why do SWFs need to undertake SRI? How to implement SRI strategies by SWFs? Can SWFs influence corporate performance through SRI? This paper analyses the impact of SWFs in the realm of SRI and clarifies relevant legal issues concerning SRI initiatives by SWFs. It first examines the rationale of SRI and the reasons to implement SRI from theoretical and practical perspectives. It then questio...

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