Sustainable Finance and Stewardship: Unlocking Stewardship's Sustainability Potential

Sustainable Finance and Stewardship: Unlocking Stewardship's Sustainability Potential

Dionysia Katelouzou, Alice Klettner

Series number :

Serial Number: 
521/2020

Date posted :

May 30 2020

Last revised :

May 30 2020
SSRN Share

Keywords

  • institutional investors • 
  • stewardship codes • 
  • Sustainable Finance • 
  • ESG • 
  • fiduciary duties • 
  • Transparency • 
  • accountability • 
  • Corporate governance

This paper explores the role of investor stewardship against a background of broader efforts to improve the sustainability of financial markets. Stewardship codes, encouraging institutional investors to act as long-term, responsible shareholders, comprise an emerging aspect of contemporary corporate governance frameworks with important implications for sustainable finance.

They have the potential to promote the incorporation of environmental, social and governance (ESG) factors into both financial and business decision-making. This paper examines the way in which 25 stewardship codes from across the world approach ESG integration and explores the possibilities for enhancing their impact on sustainability. It concludes that stewardship codes form an influential part of the overall network of regulatory instruments supporting sustainable finance. They help to secure transparency, accountability and a progressive interpretation of long-standing fiduciary duties that better balances the interests of all stakeholders.
 

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Published in

Published in: 
Publication Title: 
An edited version of the paper will be published as a chapter in Global Shareholder Stewardship: Complexities, Challenges and Possibilities (Dionysia Katelouzou & Dan W. Puchniak eds, Cambridge University Press, Forthcoming)

Authors

Real name:
Alice Klettner