Sustainable Finance and Stewardship: Unlocking Stewardship's Sustainability Potential

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)

European Corporate Governance Institute - Law Working Paper No. 521/2020

38 Pages Posted: 12 May 2020 Last revised: 29 May 2020

See all articles by Dionysia Katelouzou

Dionysia Katelouzou

King's College London - The Dickson Poon School of Law; Transnational Law Institute

Alice Klettner

University of Technology Sydney (UTS)

Date Written: April 17, 2020

Abstract

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.

Keywords: institutional investors, stewardship codes, sustainable finance, ESG, fiduciary duties, transparency, accountability, corporate governance

JEL Classification: G23, G30, G32, K22, N20, M14

Suggested Citation

Katelouzou, Dionysia and Klettner, Alice, Sustainable Finance and Stewardship: Unlocking Stewardship's Sustainability Potential (April 17, 2020). 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), European Corporate Governance Institute - Law Working Paper No. 521/2020, Available at SSRN: https://ssrn.com/abstract=3578447 or http://dx.doi.org/10.2139/ssrn.3578447

Dionysia Katelouzou (Contact Author)

King's College London - The Dickson Poon School of Law ( email )

Somerset House East Wing
Strand
London, London WC2R 2LS
United Kingdom

Transnational Law Institute ( email )

London, England WC2R 2LS
United Kingdom

Alice Klettner

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

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