The times are they a-changin’? Tracking sovereign wealth funds’ sustainable investing

Bernardo Bortolotti, Giacomo Loss, Robert W. van Zwieten

Research output: Contribution to journalArticlepeer-review


This paper analyzes the orientation towards sustainable investment by global sovereign wealth funds (henceforth SWFs) over the last two decades. Our data analysis reveals that over the last 5 years, there has been a noticeable uptick in investing along the Sustainable Development Goals (henceforth SDGs) by SWFs. From 2018 onwards, momentum has been building in climate and energy, especially in deal value. We also see agriculture come to the fore in 2020, and to a lesser degree, investments in education, as SWFs appear to extend their investment remits slowly but surely into other long-term investment themes. The paper also provides preliminary descriptive evidence about the drivers of sovereign sustainable investment, showing that the presence of explicit environmental, social, and governance (henceforth ESG) policies in place favor capital deployment aligned with SDGs. Finally, the paper studies the ESG performance of a sub-sample of listed firms that SWFs have invested in, finding a significant deterioration in the governance pillar. This result is broadly consistent with previous research on the agency costs of sovereign ownership. The paper concludes by making policy recommendations regarding fiduciary duty, investee corporate governance, and climate investments, which would contribute to modernizing the role of SWFs in the global economy.

Original languageEnglish (US)
Pages (from-to)276-305
Number of pages30
JournalJournal of International Business Policy
Issue number3
StatePublished - Sep 2023


  • ESG
  • Sustainable Development Goals
  • sovereign wealth funds

ASJC Scopus subject areas

  • Business and International Management
  • Management of Technology and Innovation


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