ABSTRACT
There is a growing base of evidence to highlight that companies which bring sustainability into the heart of their business strategy, outperform their counterparts over the long-term, both in terms of stock market and accounting performance. Corporate governance is about how companies are directed and controlled. It involves many different actors who have a stake in the ownership and control of companies, including shareholders, management, corporate boards, workers and their unions, and other stakeholders. With significant growth in pension assets, indexing has become a popular investment strategy. While indexing mitigates asset churning, the large number of investee companies held in indexed funds is difficult and costly to monitor. Good corporate governance helps to promote accountability throughout the company’s operations, including the company’s obligations to respect the international human rights of workers. Pension funds may implement responsible investments through a variety of approaches, from passive to active.
