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The Influence of Covid-19 Pandemic on Consideration of Corporate Social Irresponsibility by Sovereign Wealth Funds

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  • Marty-Jörn Klein
  • Gabriela Chmelíková
  • Jozef Palkovič

Abstract

Sovereign wealth funds (SWFs) have a significant influence on global financial markets, with assets exceeding USD 11.2 trillion and accounting for 40% of the world's largest 100 asset owners' total assets. Understanding the drivers behind SWFs' investment decisions is crucial. This study examines the impact of the COVID-19 pandemic related to corporate social responsibility (CSR) and irresponsibility (CSI) compared to financial data on SWFs' investment decisions, analysing 72% of their total public equity holdings from 2019 to 2023. Findings reveal that SWFs prioritize company self-reported environmental, social and governance (ESG) metrics over public CSI information when making investment decisions. Furthermore, public equity holding CSI data have a more pronounced influence on the investment decision of SWFs in countries with higher transparency of sustainability. The study underscores the necessity for greater ESG integration into SWFs' investment strategies to demonstrate a commitment to sustainable investing practices. This research illuminates the path towards a more responsible and sustainable approach for SWFs on global financial markets.Implications for Central European audience: Our conclusions could help encourage greater ESG integration into investment strategies and promote sustainable investing practices more broadly, not limited to liquid assets, to showcase a sustainable "walk the talk". A special focus should be put on CSI's development of target investments. Future research might also consider whether the investment behaviour of SWFs is equivalent to that of other major investors, such as insurance companies and public pension schemes.

Suggested Citation

  • Marty-Jörn Klein & Gabriela Chmelíková & Jozef Palkovič, 2025. "The Influence of Covid-19 Pandemic on Consideration of Corporate Social Irresponsibility by Sovereign Wealth Funds," Central European Business Review, Prague University of Economics and Business, vol. 2025(2), pages 45-73.
    • Handle: RePEc:prg:jnlcbr:v:2025:y:2025:i:2:id:383:p:45-73
    DOI: 10.18267/j.cebr.383
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    Keywords

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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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